Post-Holiday Copper Inventories in China's Major Regions Ended Seven Consecutive Weeks of Destocking [SMM Weekly Data]

SMM May 6 News:

Data Brief: As of Wednesday, May 6, SMM copper inventories in mainstream regions nationwide increased by 9,900 mt WoW from pre-holiday levels to 252,900 mt. Total inventory was up 124,400 mt compared to the same period last year (128,500 mt), ending seven consecutive weeks of destocking.

Specifically, Shanghai saw simultaneous increases in both imported and domestic copper arrivals, while elevated copper prices suppressed downstream rigid demand, pushing regional inventory into a buildup phase. Jiangsu continued its destocking trend, with reduced domestic supply arrivals and steady warehouse withdrawal pace, resulting in continued inventory pullback. Guangdong ended its prior destocking trend, as smelting maintenance dragged on domestic arrivals, but concentrated downstream stockpiling before the Labour Day holiday and marginal recovery in consumption supported steady regional inventory decline.

Market outlook: Supply side, imported arrivals are expected to converge MoM while domestic supply increments are released, keeping overall supply relatively loose. Demand side, post-holiday downstream purchasing sentiment was mediocre, mostly limited to rigid-demand restocking, with overall consumption pace slightly weakening. Surveys indicated that copper cathode rod operating rates this week are expected to pull back to 58.89%, down 7.46 percentage points WoW. Overall supply-demand pattern suggests the current copper market features marginally loose supply with only rigid demand from downstream, and social inventory is expected to continue a modest inventory buildup trend in the short term.