China Weekly Inventory Summary and Data Wrap (Apr 14)

SHANGHAI, Apr 14 (SMM) - This is a roundup of China's metals weekly inventory as of April 14.

SMM Weekly Updates on China Aluminium Ingot and Billet Social Inventories as of April 13

Aluminium ingot: The aluminium ingot social inventories across China’s eight major markets totalled 966,000 mt as of April 13, down 72,000 mt from a week ago and 40,000 mt from April 3. The figure was also 97,000 mt below the same period last year. So far this month, the inventory has dropped by 121,000 mt. The current inventory is at the lowest level when compared to the same period of the past five years. The low inventory of aluminium ingots is partly associated with growing proportion of molten aluminium in smelters’ total output. Therefore, how the share of molten aluminium and aluminium ingot output will change deserves close attention. In view of falling cargo arrivals, aluminium ingot stocks are expected to drop further.

Aluminium billet: The domestic aluminium billet social inventory stood at 159,600 mt as of April 13, down 4,900 mt from a week ago. The past few weeks have seen limited changes in aluminium billet inventory. The weekly decline was mainly due to fewer arrivals caused by railway maintenance in Xinjiang. Aluminium billet withdrawals from social warehouses in major markets have decreased for four consecutive weeks as demand recovery failed to sustain into April. The simultaneous reduction in arrivals and sales have resulted in small fluctuations in aluminium billet stocks. SMM will keep a close eye on when the transportation in Xinjiang will recover and changes in downstream operating rates.

Social Inventory of Lead Ingots Increases as Expected Approaching Delivery of SHFE 2304 Lead Contract

According to SMM research, according to SMM research, as of April 14, the total social inventory of SMM lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin reached 40,500 mt, up 7,000 mt from last Friday (April 7) and up 7,000 mt from this Monday (April 10).
According to research, the supply of lead ingots in Jiangsu, Zhejiang and Shanghai has been further tightened. Approaching the delivery of SHFE 2304 lead contract, the deliverable goods will be transferred to the SHFE warehouses. As such, the inventory of lead ingot social inventory increased as expected while the supply in the spot market decreased. In this scenario, cargo holders mainly sold at premiums. As of April 14, the prices of small orders in Jiangsu, Zhejiang and Shanghai were in premiums of 0-50 yuan/mt against the SHFE 2305 lead contract. Next week, due to the continuous maintenance of lead smelters, the regional supply of lead ingots will be tightened further. But the lead consumption will be weak as well. Given the delivery of SHFE 2304 lead contract, it is expected that the social inventory of lead ingots will rise before falling.

Zinc Ingot Social Inventory Down 8,300 mt from Monday

SMM data shows that social inventories of zinc ingots across seven major markets in China totalled 141,700 mt as of April 14, down 8,300 mt from Monday April 10 and 5,800 mt lower than a week ago. In Shanghai, the market arrivals were stable, and downstream enterprises only restocked on dips, resulting in a slight decline in local inventory. In Guangdong, downstream buyers were motivated by low zinc prices to purchase amid tight arrivals. As a result, the inventory in Guangdong dropped sharply. In Tianjin, the inventory dropped as downstream players restocked on dips while the arrivals were low. Overall, the total inventory in Shanghai, Guangdong and Tianjin fell 5,100 mt, and that across seven major markets in China was down 8,300 mt.

Copper Inventory in Major Chinese Markets Declined This Week

As of Friday April 14, SMM copper inventory across major Chinese markets decreased by 4,600 mt from Monday April 10 to 190,100 mt. down 12,200 mt from last Friday. Inventories increased 6,000 mt in Shanghai. Those in Guangdong, Jiangsu and Tianjin fell 1,200 mt, 2,500 mt and 300 mt respectively. The stocks in Zhejiang and Jiangxi remained unchanged.

Downstream buyers purchased as required as copper prices continued to climb. However, with the expansion of import losses, the inflow of imported copper decreased during the week, so inventories dropped in some regions.

Arriving shipments of domestic copper in Shanghai due to the delivery of the SHFE 2304 copper contract led to a slight increase in inventories.

Next week, import losses can hardly improve, and this will limit the inflow of imported copper. Some cargoes under warrants will be offered for sale after the delivery. Copper inventories should fall slightly.

Pure Nickel Bonded Zone Inventory Remains Flat from Apr 7
As of April 14, bonded zone inventory of pure nickel stood flat WoW at 4,300 mt. The inventory of nickel briquettes was 1,370 mt, and that of nickel plates was 2,930 mt. SHFE/LME nickel price ratio fell, and the import window remained closed. NORNICKEL nickel premiums rose following the nickel price move, and the transactions weakened. In terms of nickel briquettes, according to SMM research, the demand for nickel briquettes from nickel salt factories still existed, and the inventory of nickel briquettes in bonded zone is expected to fall in the near future.

Nickel Ore Inventories at Chinese Ports up 315,000 wmt WoW

As of April 14, port inventories of nickel ore in China stood at 6.55 million wmt, up 315,000 wmt WoW. The total Ni content was 51,000 mt. The port inventory across seven major Chinese ports totalled 3.27 million wmt, 185,000 wmt higher than last week. Nickel ore prices stood stable this week. NPI prices edged higher to 1,052yuan/mtu, but the NPI plants still held a wait-and-see sentiment, hence the nickel ore transactions were poor. SMM believes that the nickel ore inventory at Chinese ports will rise in the near future.