SMM News on July 14:
As of Monday, July 14, copper inventories in SMM's mainstream regions nationwide increased by 3,900 mt WoW to 147,600 mt. Compared to the inventory changes from last Thursday, inventories in most regions, except Shanghai, generally increased. Total inventories were 237,300 mt lower than the 384,900 mt recorded in the same period last year. Specifically, Shanghai's inventories were 155,300 mt lower than the same period last year, Guangdong's were 53,400 mt lower, and Jiangsu's were 31,500 mt lower.
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Specifically, Shanghai's inventories decreased by 4,000 mt compared to last Thursday. The reduction in imported copper arrivals, coupled with higher outflows from warehouses, led to a significant decline in local inventories. Jiangsu's inventories increased by 5,700 mt WoW to 23,400 mt, and Guangdong's inventories increased by 1,900 mt WoW to 25,800 mt. Although consumption improved in these two regions by the end of the week, as reflected by the continuous recovery in Guangdong's daily average outflows from warehouses, higher arrivals (with a significant portion of the cargoes intended for delivery) led to an increase in total inventories.
Outlook: We expect that the arrivals of imported copper this week will decrease compared to last week, while the arrivals of domestically produced copper will increase, leading to a higher total supply than last week. On the consumption side, we anticipate that consumption will increase this week compared to last week following the pullback in copper prices. According to our survey, the weekly operating rate of copper cathode rod is expected to be 74.57% this week, up 7.58 percentage points WoW and 1.71 percentage points YoY. Therefore, we believe that there will be an increase in both supply and demand this week, and inventories are expected to decline again.
