Falling Copper Prices Spurred Downstream Buyers to Replenish Inventories; Overall Trading This Week Was Better Than Last Week [SMM South China Spot Copper Cathode Weekly Review]

SMM News, March 5:

Guangdong: This week, premiums in the region fluctuated and trended higher. Falling copper prices prompted downstream users to restock, while suppliers took the opportunity to hold prices firm and make shipments. Overall trading this week was better than last week. As of Thursday, high-quality copper was quoted at 0 yuan/mt, up 100 yuan/mt from last Thursday; standard-quality copper was quoted at a discount of 200 yuan/mt, up 70 yuan/mt from last Thursday; and SX-EW copper was quoted at a discount of 260 yuan/mt, up 70 yuan/mt from last Thursday. On Thursday, the price spread in premiums for standard-quality copper between Shanghai and Guangdong was 30 yuan/mt, with Shanghai higher. The relatively small price spread meant there was no cross-regional cargo transfer. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses stood at 97,100 mt, an increase of 4,000 mt from last Thursday; warrants totaled 52,800 mt, up 3,000 mt from last Thursday. Early in the week, spot discounts were relatively large and suppliers actively shipped to delivery warehouse, but in the latter half of the week, shipments to delivery warehouse were relatively small. Specifically, arrivals this week were 15,600 mt/week, slightly above the annual average (14,000 mt/week), mainly due to continued arrivals of domestic copper, while arrivals of imported copper were limited. Warehouse withdrawals were 11,600 mt/week, still below the annual average (14,200 mt/week). Some enterprises did not fully resume production until after the Lantern Festival, which led to warehouse withdrawals being below normal levels.

Looking ahead to next week, more processing enterprises are expected to return to normal production, and restocking volumes will increase accordingly, while arrivals have not increased. Therefore, inventory is expected to show demand exceeding supply next week, with inventory fluctuating downward, and spot premiums are expected to continue rebounding.

(The above information is based on market collection and a comprehensive assessment by the SMM research team. The information provided herein is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a replacement for their own independent judgment. Any decisions made by clients are unrelated to SMM.)