SHANGHAI, Oct 9 (SMM) - As of October 9, SMM copper inventory across major Chinese markets added 16,500 mt to 82,700 mt compared with the pre-holiday period, which was lower than the accumulated amount (20,900 mt) in the same period last year. The total inventory dropped 28,300 mt compared with the same period last year when the figure was 111,000 mt. During the National Day holiday, the inventory in all regions of China grew. In detail, the inventory in Shanghai added 3,400 mt to 59,800 mt, the inventory in Guangdong rose 7,900 mt to 13,900 mt, the inventory in Jiangsu grew 4,500 mt to 5,100 mt, and the inventory in other regions increased slightly.
The inventory in east China grew slower than that in south China, for example, the inventory in Shanghai only added 3,400 mt while that in Guangdong rose 7,900 mt. Moreover, the data is also lower than the same period last year when the inventory in Shanghai increased 10,200 mt and that in Guangdong rose6,400 mt. SMM attributes the reason for the huge difference to the consumption in these two places. According to SMM pre-holiday research, most of the downstream companies in east China did not have holiday or only had 1-2 days off during the National Day holiday. However, most processing enterprises in Guangdong had a holiday of 5-6 days, which can also be reflected from the decline in the average daily shipment flowing out of the warehouses in Guangdong.
There are a few days left before the delivery of the SHFE 2210 copper contract. The spot prices will be quoted at discounts before the delivery amid the wide spread between the front-month and next-month contracts, thus the smelters may be more willing to deliver. Therefore, SMM believes that the inventory after the holiday will rise sharply, but the growth may be lower than expected.
