As of Tuesday, October 8, SMM copper inventories in major regions nationwide increased by 33,400 mt compared to before the holiday, reaching 198,900 mt. This was due to a decline in consumption as some downstream enterprises took a few days off during the holiday. Total inventory was still 84,600 mt higher than the same period last year, which was 114,300 mt; specifically, Shanghai was 46,600 mt higher, Guangdong was 30,000 mt higher, and Jiangsu was 12,000 mt higher.
Specifically, Shanghai's inventory slightly increased by 2,400 mt to 123,000 mt compared to before the holiday. During the National Day holiday, the port and warehouse operations in Shanghai were less efficient, resulting in lower inflows. We understand that over 20,000 mt of inventory is still waiting to be stored, and it is expected that inventory will continue to increase in the future. Jiangsu's inventory increased by 7,900 mt to 21,400 mt, as inflows exceeded outflows, causing a slight increase in inventory. Guangdong's inventory significantly increased by 22,400 mt to 47,300 mt, as most downstream processing enterprises in Guangdong took a 5-7 day holiday, leading to weak consumption and a significant increase in warehouse arrivals. This is also reflected in the continuous decline in Guangdong's daily outflows.
Looking ahead, imported copper will continue to arrive after the holiday, but domestic arrivals are expected to decrease, leading to an increase in total supply. On the demand side, due to the continuous rise in copper prices and increased consumption of secondary copper, it is expected that the consumption of copper cathode will decrease after the holiday. Therefore, we anticipate a situation of increased supply and decreased demand, with a significant increase in inventory in the first week after the holiday. Attention should be paid to whether weekly inventories will decrease again next week.
