SMM February 12:
Guangdong Region: Premiums and discounts in the region trended higher with fluctuations this week. On one hand, some downstream enterprises still had restocking activities before the holiday; on the other hand, arbitrage opportunities existed due to the large price spread between futures contracts immediately after the Chinese New Year, prompting traders to actively purchase. As of Thursday, high-quality copper was quoted at a premium of 20 yuan/mt, up 20 yuan/mt WoW; standard-quality copper was quoted at a discount of 100 yuan/mt, up 70 yuan/mt WoW; SX-EW copper was quoted at a discount of 160 yuan/mt, up 70 yuan/mt WoW. On Thursday, the price spread for standard-quality copper premiums and discounts between Shanghai and Guangdong was 0 yuan/mt, and there were no cross-region transfers due to the absence of a price difference. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses was 47,900 mt, an increase of 2,300 mt WoW; total warrants amounted to 30,000 mt, an increase of 6,600 mt WoW. The relatively large spot discounts prompted suppliers to actively deliver goods to warehouses, leading to a significant increase in warrant volume. Specifically: warehouse arrivals this week were 15,700 mt/week, down 3,200 mt/week WoW, slightly above the annual average (14,000 mt/week). Arrivals of imported copper were limited this week, mainly consisting of domestic goods. Poor downstream consumption led suppliers to redirect goods to warehouses. Warehouse withdrawals were 13,400 mt/week, down 4,000 mt/week WoW. More downstream enterprises went on holiday this week, and weak demand led to a decline in withdrawals.
Looking ahead to next week, with the upcoming Chinese New Year holiday, only a few processing enterprises will maintain low operating rates, while most enterprises will be on holiday. Guangdong inventory is expected to increase by approximately 30,000 mt after the holiday compared to pre-holiday levels.
(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided herein is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.)
