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SMM Copper Demand Surprise Index: China Copper Demand to Change Little YoY in June 2017

SMM Insight 11:54AM Jun 16, 2017 Source:SMM

SHANGHAI, May 16 (SMM) – The final SMM Copper Demand Surprise Index (SMMCDSI) was -39.09 in April, and the index was -43.26 in May, worse than preliminary data of -29.53. SMM expects the index to come in at -5.47 in June, largely flat on a yearly basis.

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Copper imports grew sharply in May along with concentrated arrivals of shipments, but it is now the final stage of peak-demand season, with demand support waning, dragging down the index in May. SMM survey finds robust demand from home appliance sector pushed up overall utilization rates at domestic copper processing enterprises in May. The rate is expected to fall slightly to 74.64% in June as the onset of off-season will be felt by copper processing producers. (For details, please see SMM Copper Monthly Report)

Month

1

2

3

4

5

6

2017 SMMCDSI

78.88

77.13

-32.59

-39.09

-43.26

-5.47

2016 SMMCDSI

83.25

30.93

63.72

36.47

3.39

-5.96

The SMM Copper Demand Surprise Index (SMMCDSI) is an objective and quantitative method of evaluation of copper demand in China, and the index is issued around 15 every month, and the issuing date will likely be advanced for business development in the future.

The SMMCDSI index defines the spread between published data of refined copper cathode and scrap copper supply in China, and SMM surveyed and estimated data of domestic copper downstream producers. After normalization, the spread is called the Surprise. When the reading is in positive territory, it indicates that copper demand is above market expectation, and when the reading is above 50, it indicates a high chance for copper futures prices to rise; when the reading is in negative territory, it indicates that copper demand is below market expectation, and when the reading is below -50, it indicates a high chance for copper futures prices to fall. 

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