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

SMM January 12:

Data Review: As of Monday, January 12, SMM's national copper inventories in mainstream areas increased 10.95% WoW, with total inventory up 101,700 mt YoY.

By region, Shanghai's copper cathode inventory saw a buildup WoW. Although the pace of inbound and outbound flows was largely balanced, some cargoes were diverted to Shanghai due to saturated warehouse capacity in Changzhou, pushing up local inventory. Jiangsu witnessed a notable inventory buildup, primarily driven by increased arrivals of domestic copper from northern China. Approaching the delivery period and with end-use consumption showing no improvement, smelters concentrated shipments to warehouses, leading to a continued rise in Guangdong's inventory.

Looking ahead, supply side, arrivals of imported copper remained low, while domestic copper supply maintained a normal pace, keeping the overall supply landscape stable. Demand side, downstream purchasing sentiment weakened as copper prices rose again, 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 rate may fall short of expectations after the recent price increase. Considering both supply and demand, the market is expected to show a pattern of "stable supply and weaker-than-expected consumption" this week, and weekly inventory is projected to continue its buildup trend.