As of Monday, March 18, SMM copper inventories in mainstream regions across the country increased by 6,300 mt WoW to 395,400 mt, reaching the highest level in the past five years. The continued rise in copper prices and the low sentiment in downstream receiving goods are one of the reasons for the continuous increase in inventories. Compared with changes in inventories last Thursday, inventories increased in most regions across the country. The total inventory is 176,800 mt higher than the 218,700 mt in the same period last year, of which Shanghai is 126,200 mt higher than the same period last year, Guangdong is 4,600 mt lower, and Jiangsu is 46,900 mt higher.
Specifically, inventories in Shanghai increased by 3,900 mt to 254,300 mt from last Thursday, while inventories in Jiangsu remained unchanged from last Friday. The decrease in the arrival of imported copper was one of the reasons for the decline in inventory growth. Inventories in Guangdong increased by 2,200 mt to 58,900 mt. There were still more shipments from smelters over the weekend. In addition, weak consumption was far lower than the same period in history. This can also be reflected in the fact that Guangdong's average daily shipments remained at a low level.
Looking ahead, we maintain our view from last Thursday: As far as we know, the arrival of imported copper decreased this week, and the arrival of domestic copper will also decrease. It is expected that the total supply will decrease compared with last week. However, downstream consumption is expected to be weaker than last week. The main reason is the weakening of consumption after the sharp rise in copper prices. Therefore, we believe that this week will present a situation of weak supply and demand, and weekly inventories will continue to rise, but the increase will be smaller than last week.
