SMM March 6 News:
Guangdong Region: This week, premiums and discounts in the region slightly increased. Although inventory continued to decline, the large outflows from warehouses limited the rise in premiums. As of Thursday, high-quality copper was quoted at a premium of 20 yuan/mt, up 10 yuan/mt WoW; standard-quality copper was quoted at a discount of 50 yuan/mt, up 20 yuan/mt WoW; hydro copper was quoted at a discount of 110 yuan/mt, up 40 yuan/mt WoW. The reduced supply of hydro copper narrowed its price spread with standard-quality copper. On Thursday, the price spread of premiums and discounts for standard-quality copper between Shanghai and Guangdong was 10 yuan/mt higher in Shanghai, which was relatively small and left no room for interregional transfers. According to SMM statistics, as of Thursday, the total inventory in Guangdong was 66,000 mt, down 1,400 mt WoW, and the total warehouse warrants were 47,300 mt, down 2,800 mt WoW. Specifically, this week’s arrivals were 10,600 mt/week, up 500 mt/week WoW, far below the annual average level (14,000 mt/week). The export window opened, and smelters increased exports, so arrivals are expected to remain low next week. Outflows from warehouses were 13,000 mt/week, down 3,400 mt/week WoW, slightly below the annual average level (14,200 mt/week). With copper prices rising significantly, downstream demand decreased compared to last week.
Looking ahead to next week, both domestic and imported copper arrivals are expected to remain low, while downstream enterprises are likely to maintain normal production. Therefore, we believe that next week will see a scenario of reduced supply and stable demand, with weekly inventory continuing to decline. However, the ongoing large outflows of warehouse warrants will suppress the rise in spot premiums.
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