SMM

As of Monday, December 23, SMM data showed that copper inventories in major regions across China rose by 700 mt WoW to 99,400 mt, but total inventories were 49,000 mt higher YoY compared to 50,400 mt last year. Among them, inventories in Shanghai were 41,700 mt higher YoY, Guangdong was 5,600 mt lower YoY, and Jiangsu was 13,500 mt higher YoY.

Specifically, inventories in Shanghai increased by 1,900 mt WoW to 72,100 mt, while inventories in Jiangsu rose by 400 mt WoW to 15,600 mt. Over the weekend, both domestic and imported copper arrivals were recorded, and downstream consumption showed signs of weakening, leading to an increase in inventories in these regions. In Guangdong, inventories decreased by 1,500 mt to 5,700 mt. Although downstream consumption in Guangdong has recently shown signs of weakening, as reflected by the low daily outflows from warehouses, arrivals remained relatively low. Additionally, the relatively small Shanghai-Guangdong price spread reduced cross-regional transfers, resulting in continued inventory declines in this region.

Looking ahead, based on our understanding, imported copper arrivals are expected to continue, and domestic copper arrivals are also anticipated to gradually increase, leading to a likely increase in total supply WoW. On the demand side, as year-end approaches, downstream end-user enterprises are beginning to control cash and inventory levels, resulting in a decline in order volumes. According to our survey, the weekly operating rate of copper cathode rod producers is expected to decrease to 77.29% this week, down 3.33 percentage points WoW. Therefore, we anticipate a scenario of increasing supply and decreasing demand this week, with weekly inventories likely to rise again.