SHANGHAI, Sep 30 – As of Thursday September 30, the copper inventory in the mainstream Chinese market dipped by 21,000 mt from Monday to 90,100 mt, continuing to set a new low for the year.
The main contributors of the inventory decline are Guangdong and Jiangsu, in which places the inventory fell 2,700 mt and 1,000 mt, respectively.
As the power rationing in Guangdong this week has weakened compared to last week, large downstream copper processing companies have generally resumed normal production. And the operating rate has risen significantly this week. In addition, some processing plants have refrained from halting production during the National Day holidays to catch up with the output, and restocked before the holiday. On the contrary, the inventory in Shanghai has increased by 1,500 mt.
Affected by the power rationing, many downstream companies that will close during the National Day holidays showed little buying interest ahead of the holiday. This combined with the inflow of imported copper has led to an increase in inventories. Some smelters will gradually recover after the overhaul post holiday. But output at many smelters will decline due to the power rationing and production restrictions. According to the experience of the past few years, the inventory will increase on the first day after the holidays.
SMM expects that the increase on the first day post-holiday will be less than the 23,000 mt in the same period of previous years.