Inventory Declines for Eight Consecutive Days, Driving Spot Premiums Significantly Higher, with Further Increases Expected in the Future [SMM South China Copper Cathode Spot Weekly Review]

Published: Mar 13, 2025 17:50 (GMT+8)

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Guangdong Region: This week, premiums and discounts in the region continued to rise, with eight consecutive weeks of inventory declines being the most direct driver of the increase in premiums. As of Thursday, high-quality copper was quoted at a premium of 90 yuan/mt, up 70 yuan/mt WoW; standard-quality copper was quoted at a premium of 30 yuan/mt, up 80 yuan/mt WoW; and hydro copper was quoted at a discount of 50 yuan/mt, up 60 yuan/mt WoW. On Thursday, the price spread of premiums and discounts for standard-quality copper between Shanghai and Guangdong was 40 yuan/mt higher in Guangdong, which was relatively small and left no room for inter-regional transfers.

According to SMM statistics, as of Thursday, the total inventory in Guangdong warehouses was 53,400 mt, down 12,400 mt WoW, while warrants totaled 38,000 mt, down 6,500 mt WoW. Specifically, warehouse arrivals this week were only a meager 3,600 mt/week, a significant drop of 7,100 mt/week WoW, far below the annual average level (14,000 mt/week). It is reported that smelters around Guangdong have been exporting, with direct shipments from smelters increasing, and shipments to Guangdong from other provinces decreasing due to increased consumption in those provinces. These factors collectively contributed to the sharp decline in warehouse arrivals. Outflows from warehouses were 15,900 mt/week, up 2,900 mt/week WoW, exceeding the annual average level (14,200 mt/week). Although copper prices have risen, downstream buyers continued restocking, particularly increasing their pickup volume from warehouses.

supply is expected to remain tight due to increased exports and production cuts, while downstream consumption is likely to decrease due to higher copper prices, leading to reduced procurement volumes. Therefore, we anticipate a weak supply and demand scenario next week, with weekly inventory continuing to decline, albeit at a slower pace than this week.

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