Copper inventories in mainstream regions across the country continued to show an inventory buildup trend over the weekend [SMM weekly data].

SMM Jan. 12:

Data Review: As of Monday, Jan. 12, SMM national mainstream copper inventories increased 7.16% WoW, with total inventory up 101,700 mt YoY.

By region, Shanghai copper cathode inventory saw a buildup WoW. Although the inbound and outbound pace was basically balanced, some cargoes were diverted to Shanghai due to saturated warehouse capacity in Changzhou, pushing up local inventory. Jiangsu saw a significant buildup, mainly due to increased arrivals of domestic copper cargoes from the north. Ahead of the delivery period and with end-use consumption showing no improvement, smelters concentrated shipments to warehouses, leading to a continued rise in Guangdong inventory.

Looking ahead, supply side, imported copper arrivals continued at low levels, while domestic copper supply maintained a normal pace, keeping the overall supply landscape stable. Demand side, suppressed by rising copper prices, downstream purchasing sentiment weakened, and market response was more mediocre than before. According to our survey, the weekly operating rate for copper cathode rod is expected at 58.83% this week, up 11.01 percentage points WoW but down 11.63 percentage points YoY; however, the actual operating performance may fall short of expectations after the price rise again. Considering both supply and demand, the market is expected to show a "stable supply, consumption below expectations" pattern this week, and weekly inventory is expected to continue its buildup trend.