Weekly report of inventory for the previous issue on July 5, 2019

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the Shanghai spot copper market is expected to see a phased recovery. Demand side, as a new monthly procurement cycle begins, the previously pent-up purchasing demand of downstream enterprises will be gradually released. Coupled with the stockpiling window ahead of the Qingming Festival, market inquiry activity is expected to rebound, and trading conditions may improve significantly from month-end levels, providing some support for spot discounts. From the market structure perspective, the price spread between high-quality copper and standard-quality copper has remained at a relatively narrow level, reflecting that actual consumption demand still dominates the market, while brand premiums have weakened. Supply side, imported cargoes have continued to arrive recently, and the destocking speed of social inventory in Shanghai has slowed, leaving overall circulating supply relatively ample and limiting the room for discount recovery. Overall, driven by early-month procurement and pre-holiday stockpiling, spot prices against the SHFE copper 2604 contract are expected to see some narrowing in discounts tomorrow.

Today, spot #1 copper cathode in North China was quoted at discounts of 120–60 yuan/mt against the front-month contract, with the average price down 20 yuan/mt from the previous trading day, and the average transaction price up 385 yuan/mt from the previous trading day to 95,565 yuan/mt.