SMM December 20 News:
This week, premiums in the region showed a trend of bottoming out and rebounding, mainly due to the impact of non-registered copper and some traders lowering prices to liquidate inventory. As of Thursday, high-quality copper was quoted at a premium of 190 yuan/mt, down 100 yuan/mt WoW; standard-quality copper was quoted at a premium of 140 yuan/mt, down 100 yuan/mt WoW; hydro copper was quoted at a premium of 90 yuan/mt, down 80 yuan/mt WoW. On Thursday, the price spread of standard-quality copper premiums between Shanghai and Guangdong was 60 yuan/mt higher in Guangdong. This week, the price spread was relatively small, leaving no room for inter-regional transfers, but the volumes transferred last week arrived gradually this week. According to SMM statistics, as of Thursday, the total inventory in Guangdong was 7,200 mt, hitting a new low for the year, down 1,223 mt WoW. Specifically, this week's arrivals were 11,100 mt/week, increasing slightly by 386 mt WoW, but below the annual average level (14,000 mt/week). Domestic copper arrivals remained low, and imported copper was delivered directly to factories, leading to a decline in warehouse arrivals. Outflows from warehouses were 12,300 mt/week, up 558 mt WoW, but below the annual average level (14,200 mt/week), as direct deliveries reduced warehouse outflows.
Looking ahead to next week, imported copper arrivals are expected to decrease, while domestic copper arrivals are expected to increase slightly, keeping the total supply stable. On the consumption side, as year-end approaches, downstream enterprises' orders are starting to weaken, leading to a decline in total consumption. Therefore, we expect a scenario of stable supply and weakening consumption next week, with spot inventory likely to increase slightly and premiums to weaken.
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