Copper Inventories in Major Domestic Regions Continued to Build Up Over the Weekend [SMM Weekly Data]

SMM February 9 news:

As of Monday, February 9, SMM's national mainstream copper inventories increased 0.27% WoW, but showed a destocking trend compared to last Thursday. Regional performances diverged, with only Shanghai avoiding inventory buildup, while all other mainstream regions experienced accumulation.

Specifically, Shanghai's performance was particularly unusual, as destocking occurred even as the Chinese New Year holiday approached. The main reasons were last week's significant copper price correction boosting consumption, coupled with reduced arrivals of domestic supplies. Jiangsu's inventory rose due to increased arrivals of domestic copper. Guangdong also saw inventory buildup, primarily because more local enterprises began holidays, end-use consumption weakened, and warehouse arrivals increased simultaneously.

Looking ahead, supply side, imported copper arrivals are expected to increase, while domestic copper arrivals remain stable, leading to ample overall market supply. Demand side, end-use demand is gradually weakening as the Chinese New Year holiday approaches. According to surveys, the weekly operating rate for copper cathode rod is projected to fall to 55.4% this week, down 13.67 percentage points WoW. Considering both supply and demand, the current market shows a "supply increment, marginally weakening consumption" supply-demand pattern, and social inventory is expected to accumulate this week.