Copper Inventory in Major Chinese Markets Dips This Week

As of Friday March 3, SMM copper inventory across major Chinese markets stood at 309,100 mt, down 16,300 mt from Monday and 16,300 mt from last Friday. Total inventory added 112,500 mt from pre-CNY levels, and fell for the first time since end-December 2022. Only Guangdong saw inventory growth compared to Monday. Total domestic inventory grew 80,200 mt from 228,900 mt in the same period last year. The inventory was 40,700 mt higher than the same period last year in Shanghai, 1,200 mt higher in Guangdong, 23,800 mt higher in Jiangsu, and 11,000 mt higher in Chongqing.

In detail, the inventory in Shanghai dropped 13,100 mt compared with Monday to 175,100 mt , and that in Jiangsu fell 2,700 mt  to 39,900 mt. Shipments of domestic copper to warehouses decreased recently due to growing exports, while downstream stockpiling increased amid falling copper prices, driving sharp declines in inventories in east China. Inventory in Guangdong decreased by 1,900 mt from Monday to 67,600 mt. With the production resumption of copper rod factories that had been shut down previously, consumption has recovered significantly. This can also be reflected in the continuous increase in the average daily shipments from Guangdong. The inventory growth in Chongqing is attributable to increasing arrivals and insignificant consumption recovery.

As far as we know, domestic copper is still being exported recently, while the import volume that implemented customs clearance was low. Therefore, the total supply should decrease. Consumption will continue to recover in the peak season of March unless copper prices continue to rise sharply. To sum up, SMM expects supply to fall and demand to increase next week. And inventory would fall.