This week, copper inventories in major regions across the country continued the destocking trend [SMM weekly data].

SMM January 29 News:

Data Brief: As of Thursday, January 29, SMM's national mainstream copper inventories decreased 2.24% WoW, while total inventory increased by 49,700 mt YoY, as the same period last year coincided with the Chinese New Year holiday.

By region, copper cathode inventory in Shanghai saw a buildup, with continued arrivals of northern material and further conversion of spot copper into warrants; inventory in Jiangsu decreased, primarily due to reduced arrivals of domestic copper supply and marginally improved downstream consumption; inventory in Guangdong also recorded a slight decrease, driven mainly by reduced arrivals and mildly recovering demand this week.

Looking ahead, supply side, with the import arbitrage window open, arrivals of imported copper improved, coupled with steady arrivals of domestic material, leading to an overall supply increase. Demand side, copper prices surged again to new highs, suppressing actual downstream consumption amid high price levels. Overall, the market is expected to see increased supply and weak consumption next week, with weekly inventories entering a buildup phase.