SMM November 20:
Guangdong: Spot premiums in the region trended higher with fluctuations this week. Declining copper prices prompted downstream restocking, leading to an inventory decrease and driving premiums higher. As of Thursday, high-quality copper was quoted at a premium of 100 yuan/mt, up 60 yuan/mt WoW; standard-quality copper was quoted at a premium of 10 yuan/mt, up 40 yuan/mt WoW; and SX-EW copper was quoted at a discount of 20 yuan/mt, up 20 yuan/mt WoW. The price spread between SX-EW copper and standard-quality copper widened as SX-EW copper supply increased this week. On Thursday, the price spread for standard-quality copper premiums between Shanghai and Guangdong was 0 yuan/mt. The relatively small spread left no room for inter-regional shipments. According to SMM statistics, total warehouse inventory in Guangdong reached 17,300 mt as of Thursday, down 1,700 mt WoW, with warrants totaling 8,800 mt, down 674 mt WoW. Specifically, weekly warehouse arrivals were 11,500 mt, down 646 mt WoW and below the annual average (14,000 mt). Arrivals of imported copper increased WoW, while domestic arrivals dropped significantly. Weekly warehouse withdrawals were 13,200 mt, up 380 mt WoW but below the annual average (14,200 mt). The continuous decline in copper prices prompted end-users to begin restocking, stimulating an increase in shipments.
Looking ahead to next week, arrivals of both imported and domestic copper are not expected to increase significantly. On downstream consumption: purchasing enthusiasm among enterprises has already risen following the drop in copper prices, and this situation is expected to persist into next week unless copper prices surge again. Therefore, we believe next week will see a scenario of tightening supply and increasing demand. Weekly inventory is expected to decline slightly, and spot premiums may edge higher.
(The above information is based on market data collection and comprehensive evaluation by the SMM research team. The information provided herein is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace their own independent judgment. Any decisions made by clients are unrelated to SMM.)
