SMM News on May 15:
As of Thursday, May 15, copper inventories in SMM's mainstream regions across China increased by 8,900 mt from Monday to 132,000 mt, and rose by 11,900 mt from last Thursday, ending a 10-week consecutive destocking streak. The main reasons were the decline in downstream purchasing appetite due to a large price spread between futures contracts and suppliers' active transfer to delivery warehouses. Currently, inventories have fallen back by 245,000 mt from the year's high and are 278,400 mt lower than the 410,400 mt recorded in the same period last year.
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Specifically, in the Shanghai region, inventories increased by 4,700 mt from Monday to 94,700 mt. Affected by the large price spread between futures contracts, suppliers actively transferred to delivery warehouses. As of Wednesday this week, the warrant volume in the Shanghai region surged by 26,400 mt from last Friday. In Jiangsu, inventories rose by 5,500 mt to 17,200 mt, mainly due to weakened consumption and increased arrivals. In Guangdong, inventories fell by 0.15 to 13,100 mt. Although downstream consumption has been continuously declining recently, as reflected by a significant drop in the daily average outflows from warehouses in Guangdong, total inventories are still decreasing due to even fewer arrivals.
Looking ahead, it is reported that the customs clearance volume of imported copper will remain low next week, but domestic copper arrivals will decrease from last week, suggesting that total supply will be lower than the previous week. On the downstream consumption side, purchasing enthusiasm will rise after the contract rollover. Therefore, we believe that next week will see a decrease in supply and an increase in consumption, and weekly inventories may resume their decline.
