SHANGHAI, Aug 19 (SMM) - As of Friday August 19, SMM copper inventory across major Chinese markets stood at 61,300 mt, down 9,000 mt from Monday and 9,400 mt from last Friday, hitting an annual low. Compared with Monday's data, the inventories across various regions decreased this week. The total inventory fell 89,500 mt compared with the same period last year when the inventory was recorded at 150,800 mt. Among them, the inventory in Shanghai dropped 41,400 mt, and that in Guangdong dipped 37,700 mt. The reasons for the sharp decline in the inventory this week are as follows. 1. Output of smelters in Jiangsu, Anhui, Zhejiang and Hubei reduced to varying degrees due to the power rationing. 2. Transportation efficiency in Jiangxi declined owing to the pandemic outbreak. 3. The imported copper expected to arrive at ports at the beginning of the week was delayed until the weekend.

In detail, the inventory in Shanghai dipped 3,200 mt to 48,600 mt due to the power rationing and delayed arrival of imported copper, and the inventory in Guangdong fell 2,600 mt to 5,800 mt amid the maintenance of surrounding smelters and the power rationing out of the province.  

Looking forward, more output will be cut by the power rationing, but the arrival of imported copper may increase, hence the overall supply will rise compared with this week. In terms of consumption, downstream factories were not affected by the high spot premiums, so the consumption will not drop sharply next week. SMM believes that the weekly inventory next week may rise slightly. It is necessary to pay attention to whether the scope of power rationing will continue to expand.