SHANGHAI, Dec 3 (SMM) – According to SMM statistics, the copper cathode inventory in Guangdong stood at only 5,900 mt as of December 3, the lowest for the year, and close to the historical low of 4,900 mt.

Supply

Although a large smelter in south-west China has finished its overhaul, its output is still recovering. It has mainly shipped cargoes to downstream plants, and its contribution to the social inventory was limited. In addition, the invoice issuance issue of imported copper still exists in December, limiting the growth in copper imports. Long-term contract negotiations between the smelters and the downstream buyers have prompted the smelters to adjust their shipments.

Demand

Affected by the high premiums, many copper processing companies stopped production at the end of November. But as the premiums and copper prices fell in December, the downstream companies restocked and resumed production amid the sufficient cash flows at the beginning of the month.

SMM believes that the low inventory status will remain for some time. The shipments arrivals are unlikely to increase noticeably in the short term. The downstream demand will be brisk unless a large number of copper processing companies halt production due to high premiums.

Guangdong’s social inventories will not increase significantly until the end of December.