SHANGHAI, Mar 14 - Spot quotes in Guangdong inched higher last week on the back of continuously falling social inventories driven by increased downstream purchases. As of last Friday, high-quality copper was quoted with premiums of 50 yuan/mt, up 70 yuan/mt from a week earlier, and standard-quality copper was quoted with premiums of 20 yuan/mt, up 60 yuan/mt from a week earlier. Hydro-copper was quoted with discounts of 30 yuan/mt, up 90 yuan/mt. Last Friday, the prices in Shanghai exceeded those in Guangdong by 50 yuan/mt. The price gap was so small that there was no opportunity for cargo transfer between the two. As of Friday, total inventories in Guangdong stood at 61,800 mt, a decline of 5,800 mt from a week earlier.
The arrivals in Guangdong fell 6,800 mt to 12,700 mt, lower than the weekly average of 19,000 mt for 2022. Lower customs clearance and increased direct shipments from smelters reduced arriving shipments in warehouses tangibly. Shipments leaving warehouses in Guangdong stood at 18,500 mt, a growth of 1,100 mt from a week earlier, and marginally below the weekly average of 19,500 mt in 2022. Lower copper prices have increased downstream purchases. Besides, one large downstream producer that had been under maintenance resumed production, also incentivising consumption. But it directly purchased from smelters, thus the shipments leaving warehouses were insignificant. This week, arriving shipments should increase compared to last week in view of delivery and reduced import losses.
The large downstream producer having resumed production will help improve consumption this week. SMM expects both supply and demand to grow this week, and inventory will post a small decline compared with last week.