Arrivals in the North Increased Significantly Combined with Weakening Consumption, Spot Premiums Declined [SMM South China Copper Cathode Spot Weekly Review]

SMM News on May 21:

Guangdong region: Premiums in this region trended gradually lower this week, mainly due to increased arrivals coupled with weakening consumption. As of Thursday, high-quality copper was quoted at 240 yuan/mt, down 30 yuan/mt from last Thursday; standard-quality copper was quoted at a premium of 160 yuan/mt, down 40 yuan/mt from last Thursday; SX-EW copper was quoted at 90 yuan/mt, down 40 yuan/mt from last Thursday. On Thursday, the price spread of standard-quality copper premiums between Shanghai and Guangdong showed Guangdong higher by 270 yuan/mt, and it widened to 300 yuan/mt mid-week. The relatively large price spread led to cargoes from Jiangxi and Shanghai flowing southward. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses was 20,300 mt, up 3,400 mt from last Thursday, while warrants totaled 4,900 mt, down 152 mt from last Thursday. Specifically: warehouse arrivals this week were 17,000 mt/week, up 4,000 mt/week WoW, higher than the annual average (14,000 mt/week), mainly due to increased arrivals from northern cargoes. Warehouse withdrawals were 13,700 mt/week, down 1,100 mt WoW, slightly below the annual average (14,200 mt/week), as terminal orders decreased and copper processing enterprises' operating rates declined.

Looking ahead to next week, affected by increased supply and weakening demand (according to our understanding, a large copper processing enterprise will see significant production cuts next week), inventory is expected to continue increasing, and spot premiums are expected to continue declining.

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