SMM News on May 6:
As of Tuesday, May 6, SMM copper inventories in major regions across China decreased by 1,100 mt WoW from before the holiday to 128,500 mt. Compared to the inventory changes before the holiday, inventories in most regions across the country increased, with only Shanghai experiencing destocking. Total inventories were 276,200 mt lower than the 404,700 mt recorded in the same period last year. Specifically, Shanghai's inventories were 184,300 mt lower YoY, Guangdong's were 38,100 mt lower, and Jiangsu's were 46,100 mt lower.
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Specifically, Shanghai's inventories decreased by 7,700 mt from before the holiday to 89,600 mt, mainly due to the lower arrivals of imported copper during the holiday and the moderate enthusiasm for cargo pick-up by downstream enterprises. Jiangsu's inventories increased by 3,000 mt from before the holiday to 14,900 mt, primarily due to the increased arrivals of domestically produced copper. Guangdong's inventories increased by 2,900 mt to 17,500 mt, as smelters in south-west China resumed production after maintenance, leading to increased shipments. Additionally, many downstream enterprises in Guangdong took 1-2 days off during the Labour Day holiday, which was also reflected in the pullback of Guangdong's daily average outflows from warehouses from highs. Increased supply and weakened consumption contributed to the inventory increase in the region.
Looking ahead, it is understood that the arrivals of imported copper this week will not increase significantly, but the supply of domestically produced copper will rise. It is expected that the total supply after the holiday will increase compared to before the holiday. On the consumption side, some enterprises have reported to us that new orders have begun to decrease since late April, and consumption is expected to pull back this week. Therefore, we believe that after the holiday, there will be a situation of increased supply and weakened consumption, and copper inventories may stop falling and begin to rebound during the week.
