Macroeconomic Factors for Big Leap in Base Metals October 25, SMM Reports

[SMM Shanghai spot copper] Looking ahead to tomorrow, SMM recorded social inventory in the Shanghai region at 70,800 mt, down 12,300 mt WoW from last Thursday; social inventory in the Jiangsu region at 16,300 mt, down 4,100 mt WoW from last Thursday. Inventory in the two regions in east China totaled a reduction of 16,400 mt, with destocking exceeding market expectations. Supply side, due to the persistently unfavorable SHFE/LME price ratio, port arrivals of ex-China cargoes have decreased, and combined with some shipping schedule delays, imported copper has provided relatively limited supplementation to the spot market. Demand side, after copper prices experienced a slight correction last week, downstream dip-buying demand was released. Meanwhile, the backwardation spread between consecutive months once widened, enhancing suppliers' willingness to sell and accelerating market cargo turnover, jointly driving a significant inventory decline. Intraday buying sentiment rebounded to some extent, but quotes for standard-quality copper still required successive downward adjustments before transactions could occur, reflecting that downstream buyers' acceptance of high premiums remains limited. Overall, against the backdrop of significant destocking in east China inventory and low imported arrivals supporting premiums, while downstream buyers mainly engage in dip-buying and just-in-time procurement and suppliers' willingness to sell persists, spot prices against the SHFE copper 2609 contract are expected to maintain premiums tomorrow, with the overall center likely to gradually stop falling and stabilize. The room for further significant declines is relatively limited.

[Noticia Flash del Inventario Social de Cobre de SMM] A partir del 24 de agosto, el inventario social de cátodos de cobre en las principales regiones del país de SMM disminuyó en 19.700 toneladas métricas en comparación semanal a 114.200 toneladas, una disminución de 8.800 toneladas interanual. La semana pasada, los precios del cobre se corrigieron y se liberó la demanda aguas abajo previamente suprimida, lo que impulsó significativamente los retiros de almacenes del mercado. Esto se convirtió en el principal impulsor de la inesperada reducción de existencias del inventario social de cátodos de cobre a nivel nacional.