As of Monday, August 19, SMM copper stocks in major regions nationwide decreased by 12,700 mt WoW to 288,900 mt, continuing the drop trend and falling below 300,000 mt for the first time since March. However, total stocks still rose by 216,000 mt YoY compared to 72,900 mt last year, with Shanghai up 144,800 mt YoY, Guangdong up 39,300 mt, and Jiangsu up 31,300 mt.
Specifically, Shanghai stocks decreased by 9,400 mt WoW to 191,000 mt, and Jiangsu stocks decreased by 2,700 mt to 34,900 mt, as outflows from warehouses increased due to improved consumption in east China. According to SMM forecasts, the operating rate of copper cathode rod makers will rise to 81.35% this week, up 0.43 percentage points WoW. Guangdong stocks decreased by 500 mt to 56,700 mt, reflecting good consumption in the region, as evidenced by the high daily outflows from warehouses.
Looking ahead, we maintain our view from last Friday: domestic supply will decrease due to production cuts at smelters, and the arrivals of imported copper will be limited this week, leading to a decline in total supply compared to last week. On the demand side, copper prices remain low, and many secondary copper rod makers have halted production due to new policies, which are expected to boost consumption this week. Therefore, we anticipate a scenario of reduced supply and increased demand, with weekly stocks likely to continue decreasing.
