SMM News on July 10:
As of Thursday, July 10, copper inventories in major regions across China tracked by SMM increased slightly by 800 mt from Monday to reach 143,700 mt, up by 11,900 mt from Thursday last week. Weekly inventories have seen inventory buildup for two consecutive weeks and are currently 244,900 mt lower than the 388,600 mt recorded in the same period last year.
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Breaking it down, inventories in the Shanghai region decreased by 2,300 mt from Monday to reach 95,100 mt. The decline in inventories in this region was due to a decrease in imported copper arrivals and suppliers actively reducing prices to sell off their stocks. Inventories in the Jiangsu region increased by 1,900 mt to reach 17,700 mt, while inventories in the Guangdong region increased by 0.16 to reach 23,900 mt. The increase in arrivals in these two regions this week was due to suppliers actively shipping goods to these regions for delivery, as discounts in other regions were larger. This was also reflected in the significant increase in warrants in these two regions. Although consumption recovered slightly this week due to the pullback in copper prices, the recovery was weak, as evidenced by the continued low daily average outflows from warehouses in Guangdong. In the Chengdu-Chongqing and Tianjin regions, inventories decreased slightly due to a decrease in arrivals.
Looking ahead, we expect that the arrivals of imported copper next week will decrease compared to this week, while the arrivals of domestically produced copper will increase, with total supply expected to be higher than last week. On the downstream consumption front, with copper prices continuing to pull back, we expect that the operating rate will increase next week compared to this week. Therefore, we believe that next week will see an increase in both supply and demand, with weekly inventories potentially declining again.
