As of Monday, November 4, SMM copper inventories in major regions nationwide decreased by 11,700 mt compared to last Thursday, reaching 198,100 mt. However, total inventories were 137,900 mt higher compared to 6,020 mt in the same period last year, with Shanghai up 102,900 mt, Guangdong up 21,100 mt, and Jiangsu up 15,000 mt.
Specifically, inventories in Shanghai decreased by 9,900 mt compared to last Thursday, reaching 146,900 mt, mainly due to a decrease in arrivals of imported copper affected by the typhoon. Inventories in Jiangsu increased by 500 mt to 17,100 mt, with outflows from warehouses and arrivals over the weekend being roughly equal, resulting in minimal inventory changes. Inventories in Guangdong decreased by 2,400 mt to 30,100 mt, as arrivals were reduced due to maintenance at nearby smelters, but consumption also saw a slight decline. This is reflected in the jump initially and then pullback of Guangdong's daily outflows from warehouses, indicating a decrease in both supply and demand, with a more significant reduction in supply.
Looking ahead, domestic copper supply is expected to remain limited, but imported copper is expected to increase as customs clearance returns to normal after the typhoon. Downstream consumption improved at the beginning of the month. According to our survey, the weekly operating rate of copper cathode rod producers is expected to rise to 79.75% this week, up 5.63 percentage points WoW. Therefore, we believe that this week will see an increase in both supply and demand, with weekly inventories expected to continue decreasing.
