Weekend Total Social Copper Inventory Increased, Regional Trends Diverged [SMM weekly data]

SMM, August 3:

Data Brief: As of Monday, August 3, SMM copper inventories in major regions across China rose by 6,200 mt WoW to 118,900 mt. Total inventories increased by 17,000 mt compared to 135,900 mt in the same period last year, with regional divergences.

In detail, Shanghai saw increased arrivals of domestic copper, with continuous replenishment from imported sources, coupled with weak downstream demand, leading to some inventory buildup. Jiangsu experienced limited arrivals, resulting in a modest destocking. Guangdong saw higher arrivals, but consumption had not yet improved, keeping inventories on the rise.

Market outlook: On the supply side, both domestic and imported copper cathode arrivals are expected to rebound slightly in the short term, easing the tightness of circulating cargo somewhat. On the demand side, high copper prices are weighing on enterprises' production willingness, and downstream just-in-time procurement sentiment remains weak. A survey shows that the operating rate of copper cathode rod is expected to fall to 59.72% this week, down 0.35 percentage points WoW. Under the overall supply-demand pattern, domestic spot supply is marginally loosening and end-user procurement continues to show weakness. As a result, China's electrolytic copper social inventory is expected to continue its buildup trend this week.