SMM4, March 3: ups and downs in the first quarter of 2020 so passed, the global economy affected by the outbreak of a sharp decline, Guangdong electrolytic copper stocks have also experienced a roller coaster trend (see chart below). At one point, inventories of 119100 tonnes were set on March 5, but as consumption recovered, shipments fell sharply and inventories fell sharply. As of April 3, Guangdong inventories had fallen to 82800 tonnes, only 2500 tonnes more than in the same period last year.

Why there is such a trend, we can interpret it from two aspects: out of storage and in storage:

Storage:

Although the volume of shipments fell in the first two months of the past two years compared with the same period last year, the decline was not significant; however, there was a cliff-like decline in March (- 34.9%). In addition to the reduction in production by smelters, the sharp reduction in imports of copper and the transfer of shipments by smelters are also important reasons. The sharp drop in arrivals was one of the important reasons for the rapid decline in inventories in March.

Out of the warehouse:

In the first quarter of 18 years, the level of outflow and storage is the same, which can be understood as a general balance between supply and demand. However, the output began to decline significantly from 19 years, on the one hand, affected by the decline in downstream consumption in that year, on the other hand, affected by the increase in the business of the smelter. With the easing of the epidemic in March 20, consumption in the lower reaches of Guangdong rebounded rapidly, and the output in March rose 5.2% from the same period last year, completely reversing the downturn of the previous two months.

Overall:

In 18 years, supply and demand were basically balanced, with inventory increasing only slightly by 10, 000 tons in the first quarter; in 19 years, supply exceeded demand due to the expected impact of the tax reform, and inventories increased sharply by more than 61100 tons in the first quarter; and in 20 years, affected by the epidemic, demand dropped noticeably, and inventories also increased significantly by 45400 tons in the first quarter. Looking forward to April, the volume of goods will hit bottom and rebound, but consumption growth is weak, and the removal of inventories is expected to slow in April.