SMM News on May 8:
As of Thursday, May 8, copper inventories in SMM's mainstream regions across China fell by 8,400 mt from Monday to 120,100 mt, a decrease of 9,500 mt from last Thursday. This marks the 10th consecutive week of weekly destocking. However, the destocking speed slowed this week compared to last week, primarily due to downstream enterprises taking holidays during the Labour Day holiday. Currently, inventories have pulled back by 256,900 mt from the year's highs and are 282,100 mt lower than the 404,700 mt recorded in the same period last year.
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Breaking it down, inventories in the Shanghai region fell by 3,200 mt from Tuesday to 86,400 mt, while inventories in Jiangsu decreased by 2,700 mt to 12,200 mt. The limited arrivals of domestically produced copper and moderate enthusiasm for downstream restocking have contributed to the continuous decline in inventories in east China. In Guangdong, inventories fell by 0.22 to 15,300 mt. Although downstream consumption has been declining recently, as reflected by a significant drop in the daily average outflows from warehouses in Guangdong, the total inventory level continues to decline due to even fewer arrivals.
Looking ahead, it is understood that there will be fewer arrivals of imported copper next week, and it is also difficult for domestically produced copper arrivals to increase significantly. Therefore, the total supply is expected to remain tight. Regarding downstream consumption, due to the currently significant price spread between futures contracts, downstream procurement enthusiasm has already declined. It is expected that consumption will decrease next week compared to this week. Consequently, we believe that next week will see a situation of reduced supply and declining consumption, with weekly inventories possibly continuing to decrease but at a slower pace.
