Is Copper Supply Pressure Easing in China after Sharp Declines in SHFE Copper Inventories? SMM Reports

SHANGHAI, May 10 (SMM) – In the week ending May 6, copper inventories on the SHFE fell sharply by 81,609 tonnes. 

SHFE copper inventories reached a record high of 394,777 tonnes in the week ending March 18, according to SHFE data. 

What factors are behind the sharp declines, and does this mean the easing of copper supply pressure in China?

“The drop is due largely to arrival of traditional high-demand season, decline in copper imports and smelters’ delivery of goods to China's stockpiling agency,” SMM copper analyst points out. 

Why China Copper Imports See Precipitous Decline in April?

However, copper inventories in bonded area grew during the period, increasing 120,000 tonnes to 610,000 tonnes, SMM finds. 

“China’s copper supply pressure remains high, as total copper inventories in the week ending May 6, including SHFE warehouses and bonded area, are about 30,000 tonnes higher than those in the week ending March 18,” SMM says.  

With regarding to inventory outlook, SMM expects China’s copper destocking to slow for the foreseeable future, so copper inventories will remain at highs compared with past years. 

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