[SMM data] COMEX Copper stocks on March 31, 2020

[SMM Shanghai Spot Copper] The Shanghai spot copper market is expected to continue exhibiting a weak supply-demand pattern. The contango spread between nearby months widened slightly, further encouraging suppliers to convert some spot cargo into warrants, limiting further tightening of spot liquidity. Some smelters have opted for stockpiling for delivery, coupled with suppliers' evident reluctance to sell and firm price-holding sentiment, resulting in limited tradable spot cargo in the market, which will support the spot discount structure. As the holiday approaches, downstream enterprises have generally slowed their procurement pace, with most having entered the final stage of pre-holiday stockpiling or production adjustment phases. Actual transaction activity is suppressed, and demand-side factors are unlikely to provide sustained boosts to prices. Amid intertwined factors such as high copper prices, tight supply, firm price-holding by suppliers, and pressure from the futures spread, spot discounts are expected to narrow slightly further tomorrow.

[ SMM Brass Billet Express ] Looking ahead to February, the brass billet industry is expected to face multiple pressures. Supply side, overseas offers are limited before the Chinese New Year, and supply of recycled brass raw materials remains tight. Demand side, orders in traditional sectors show no improvement, with enterprises mainly focusing on delivering existing orders and new orders being limited. Meanwhile, high and fluctuating copper prices, along with the Spring Festival holiday, will further dampen stockpiling willingness and shorten effective production time. The operating rate in February is projected to decline further.

[SMM Brass Billet Express] Copper prices fluctuated at highs in January, putting pressure on raw material procurement, while orders for brass billets contracted in industries such as valves and sanitary hardware due to difficulties in raising prices. Affected by high costs and reduced orders, some small copper billet enterprises began their holidays early from mid-to-late January. Currently, enterprises generally maintain low inventories to mitigate risks, with sample enterprises averaging only 3.95 days of raw material inventory and approximately 6.77 days of finished product inventory, reflecting overall weak stockpiling sentiment.