SMM January 2 News:
Guangdong Region: This week, premiums and discounts in the region showed a bottom-out rebound trend. At the beginning of the week, suppliers faced year-end inventory clearance pressure, causing premiums to decline continuously. Entering the new year, suppliers stopped offloading goods and stood firm on quotes. As of Thursday, high-quality copper was quoted at a premium of 150 yuan/mt, down 200 yuan/mt WoW; standard-quality copper was quoted at a premium of 100 yuan/mt, down 200 yuan/mt WoW; hydro copper was quoted at a premium of 50 yuan/mt, down 190 yuan/mt WoW. On Thursday, the price spread of standard-quality copper premiums between Shanghai and Guangdong was 30 yuan/mt higher in Guangdong, with a relatively small spread leaving no room for cross-regional transfers. According to SMM statistics, as of Thursday, the total inventory in Guangdong was 10,000 mt, an increase of 6,500 mt WoW. Specifically, this week's arrivals were 13,600 mt/week, an increase of 3,200 mt WoW, slightly below the annual average level (14,000 mt/week). Year-end inventory clearance by suppliers significantly boosted arrivals this week. Outflows from warehouses were 7,300 mt/week, a sharp decline of 6,300 mt WoW, far below the annual average level (14,200 mt/week), mainly due to production cuts by many copper rod enterprises at year-end. Looking ahead to next week, with suppliers completing inventory clearance this week, available shipments are expected to decrease next week, and arrivals are likely to decline. On the downstream consumption side, at the beginning of the month, downstream enterprises will have sufficient funds, and previously halted copper rod enterprises are expected to resume production, leading to an increase in total demand. Therefore, we believe that next week will see a scenario of reduced supply and increased demand, resulting in a decline in weekly inventory.
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