Copper inventories in major regions across the country slightly decreased by 200 mt over the weekend [SMM weekly data]

SMM News on May 26:

As of Monday, May 26, SMM copper inventories in major regions across China decreased slightly by 200 mt WoW from last Friday to 139,700 mt, ending the inventory buildup observed for two consecutive Mondays and resuming a decline. Compared to the inventory levels last Friday, changes in regional inventories varied across the country. Total inventories were 275,400 mt lower than the 415,100 mt recorded a year ago, with Shanghai's inventories 196,800 mt lower YoY, Guangdong's 39,300 mt lower, and Jiangsu's 35,200 mt lower.

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Specifically, inventories in Shanghai decreased by 3,900 mt from last Thursday to 102,800 mt, primarily due to limited arrivals of imported copper over the weekend. In Jiangsu, inventories increased by 4,600 mt from last Thursday to 19,300 mt, driven by a rise in domestic cargo arrivals and weaker consumption over the weekend. In Guangdong, inventories decreased by 1,000 mt to 12,300 mt, mainly due to reduced arrivals and increased outflows from warehouses, as reflected by the sustained increase in Guangdong's daily average outflows from warehouses.

Outlook: It is reported that this week's imported copper arrivals will exceed last week's, and domestic copper arrivals will also increase compared to last week, leading to a rise in total supply. On the consumption side, with relatively stable copper prices and no impact from the price spread between futures contracts, consumption is expected to be better than last week. According to our survey, the weekly operating rate of copper cathode rod is projected to be 77.61% this week, up 6.98 percentage points WoW and 19.03 percentage points YoY. Therefore, we believe that both supply and demand will increase during the week, with inventories expected to decrease slightly.