Smelters Resumed Operations After Maintenance, Supply Increased, and Spot Premiums Declined [SMM South China Copper Cathode Spot Weekly Review]

SMM June 5 update:

Guangdong region: Premiums in this region showed a trend of bottoming out and rebounding this week. At the beginning of the week, premiums dropped sharply due to weak consumption. As copper prices declined, downstream restocking increased, and spot premiums stopped falling and rebounded. As of Thursday, high-quality copper was quoted at 30 yuan/mt, down 90 yuan/mt WoW; standard-quality copper was quoted at a discount of 30 yuan/mt, down 80 yuan/mt WoW; SX-EW copper was quoted at a discount of 80 yuan/mt, down 60 yuan/mt WoW. On Thursday, the price spread of standard-quality copper premiums between Shanghai and Guangdong was 80 yuan/mt higher in Guangdong. The price spread was relatively small, and there was no cross-regional cargo transfer. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses was 22,800 mt, an increase of 1,300 mt WoW, with warrants totaling 5,800 mt, down 100 mt WoW. Specifically: Warehouse arrivals this week were 13,500 mt/week, an increase of 1,100 mt/week WoW, slightly below the annual average (14,000 mt/week); increased shipments from smelters were the main reason. Warehouse withdrawals were 12,100 mt/week, an increase of 1,100 mt WoW, below the annual average (14,200 mt/week). As the period straddled a month-end, the increase in downstream procurement volume was limited.

Looking ahead to next week, as nearby smelters complete maintenance, supply is expected to increase. However, downstream consumption recovery remains limited, making it difficult for inventory to decline significantly, and spot premiums are expected to hover at lows.

(The above information is derived from market research and comprehensive assessment by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are not related to SMM.)