SHANGHAI, Mar 10 (SMM) - As of Friday March 10, SMM copper inventory across major Chinese markets stood at 271,100 mt, a sharp decline of 37,000 mt from Monday and 38,000 mt from last Friday. Total inventories added 74,500 mt from pre-CNY levels, and fell for two consecutive weeks since end-December 2022. Inventories have staged an inflection point, and the destocking appeared to have accelerated. Compared with Monday, copper inventories fell across China’s major markets. Total domestic inventory grew 55,100 mt from 216,000 mt in the same period last year. The inventory was 20,800 mt higher than the same period last year in Shanghai, 6,800 mt higher in Guangdong, 16,500 mt higher in Jiangsu, and 9,300 mt higher in Chongqing.
Inventories in Shanghai decreased by 14,000 mt to 158,700 mt compared with Monday, and those in Jiangsu decreased by 10,300 mt to 29,600 mt. SMM understood that delivery taking in east China this week increased significantly compared with last week, driven by falling copper prices and increasing orders. Limited customs clearance of imported copper and exports of some copper cathode also contributed to the inventory decline in east China. Inventories in Guangdong decreased by 8,100 mt to 61,800 mt. As the large downstream producers resumed production this week, the consumption in Guangdong has also increased significantly. But this was not reflected in the average daily shipments from Guangdong warehouses due to significant growth in shipments from smelters and lower volumes of delivery taking by downstream buyers.
As the delivery of the SHFE front-month copper contract approaches, it is expected that the amount of shipments from smelters to warehouses will increase. And the customs clearance of imported copper is expected to increase from this week. As such, the total supply next week is expected to increase. Consumption looks set to recover due to the onset of the peak season and lower copper prices. To sum up, SMM expects both supply and demand to grow next week. And inventory would fall, with a smaller decline compared with this week.
