As of Monday, September 23, SMM copper stocks in major regions nationwide decreased sharply by 26,800 mt to 165,800 mt compared to last Thursday, continuing destocking with an accelerating speed. However, total inventory remained 81,000 mt higher compared to 84,800 mt in the same period last year, though the gap has narrowed significantly. Specifically, inventory in Shanghai was 55,300 mt higher YoY, Guangdong 19,500 mt higher, and Jiangsu 9,900 mt higher.
In detail, Shanghai's inventory decreased by 16,700 mt to 116,700 mt compared to last Thursday, and Jiangsu's inventory decreased by 4,500 mt to 16,400 mt. Over the weekend, both domestic and imported copper arrivals in East China decreased, leading to a drop in total supply. Downstream consumption remained strong, causing a significant decline in East China's inventory. Guangdong's inventory decreased by 5,100 mt to 28,600 mt, with the main reasons being reduced arrivals and increased outflows, as reflected in the rebound of Guangdong's daily outflows.
Looking ahead, we understand that both domestic and imported copper arrivals this week will be limited, with no significant increase in the short term. On the downstream consumption side, as the National Day holiday approaches, end-user enterprises will likely restock before the holiday, leading to a noticeable improvement in consumption this week. According to our survey, the weekly operating rate of copper cathode rod producers will rise to 83.69%, up 4.37 percentage points WoW. Therefore, we believe this week will see a scenario of reduced supply and increased demand, with weekly inventory expected to continue declining.
