SHANGHAI, Apr 21(SMM) - This is a roundup of China's metals weekly inventory as of April 21.
SMM Weekly Updates on China Aluminium Ingot and Billet Social Inventories as of Apr 20, 2023
Aluminium ingot: The aluminium ingot social inventories across China's eight major markets totalled 906,000 mt as of April 20, down 60,000 mt from a week ago and 29,000 mt from April 17. The figure was also 104,000 mt below the same period last year. 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 a 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.
Aluminium billet: The domestic aluminium billet social inventory stood at 152,600 mt as of April 20, down 7,000 mt from a week ago. The inventory has been fluctuating around the current level for several weeks. Shipments out of social warehouses began to pick up last week and transportation in Xinjiang was somehow hindered, allowing the inventory to drop. SMM will keep a close eye on when transportation in Xinjiang will fully recover and changes in downstream operating rates.
Zinc Ingot Social Inventory Down 6,000 mt from Monday
SMM data shows that social inventories of zinc ingots across seven major markets in China totalled 136,700 mt as of April 21, down 6,000 mt from Monday, April 17 and 5,000 mt lower compared with the prior week. In Shanghai, the market arrivals were scarce as buyers mainly picked up cargoes at smelters, in addition to on-dip purchases before the Workers' Day holiday. As a result, the inventory in Shanghai dropped sharply. In Guangdong, the inventory dipped amid normal arrivals as downstream buyers were motivated by low zinc prices to restock. In Tianjin, despite the concentrated arrivals of zinc ingots, the galvanising plants maintained low operating rates and only purchased on dips. Therefore, local inventory dwindled slightly. Overall, the total inventory in Shanghai, Guangdong and Tianjin fell 4,200 mt, and that across seven major markets in China was down by 6,000 mt.
Social Inventory of Lead Ingots Declines with Completion of Delivery of SHFE 2304 Lead Contract
According to SMM research, as of April 21, the total social inventory of SMM lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin reached 31,000 mt, a decrease of 9,500 mt from April 14 and 11,200 mt from April 17.
According to the survey, the supply of lead ingot was limited as both primary lead and secondary lead smelters, especially the deliverable brands in Henan and Yunnan, continued to overhaul. At the same time, after the delivery of the SHFE 2304 lead contract was completed on April 17, the lead ingots flowed into the market and downstream enterprises purchased as needed. As such, the lead ingot social inventory stopped rising and declined this week. Despite the traditional off-season, the restocking demand before the May Day holiday and the maintenance plans of primary lead smelters will drag down the social inventory of lead ingots.
Copper Inventory in Major Chinese Markets Dropped This Week and Declines to Continue
As of Friday April 21, SMM copper inventory across major Chinese markets stood at 183,500 mt, down 8,100 mt from April 17 and down 6,600 mt from a week earlier. Compared with Monday's data, the inventories across various regions were mixed this week. Shanghai, Zhejiang and Tianjin contributed to most of the inventory declines, while inventories in other regions increased.
The total inventories increased 56,200 mt from 127,300 mt in the same period last year. The inventory in Shanghai added 27,300 mt from the same period last year. The inventories were 13,800 mt higher than the same period last year, those in Jiangsu were 8,500 mt higher, and those in Zhejiang were 4,000 mt higher.
The inventory in Shanghai decreased by 8,200 mt to 103,700 mt compared with Monday. Continuously falling copper prices incentivised downstream purchasing, accelerating inventory declines. Meanwhile, smelters shipments to warehouses decreased after the delivery of the April contract.
The inventory in Guangdong increased 100 mt from Monday to 52,700 mt. This week, the inventory in Guangdong grew before falling. The reason for the slight decline in inventory in Zhejiang is the decrease in local registered warrants.
The amount of imported copper next week will increase, but the shipments of domestic smelters may decrease. The total supply will not change much. In terms of consumption, due to the fall in copper prices, the enthusiasm for downstream restocking will strengthen compared with this week.
To sum up, SMM expects supply to remain flat and demand to increase next week. And inventory would fall.
Copper Inventory in China Bonded Zone Dipped This Week but will Grow Next Week
As of Friday April 21, copper inventories in the domestic bonded zones dipped 100 mt from April 14 and stood at 155,700 mt, according to the latest SMM survey.
Inventory in the Guangdong bonded zone added 1,900 mt to 15,100 mt, while inventory in the Shanghai bonded zone dropped 2,000 mt to 140,600 mt. The SHFE/LME copper price ratio improved during the week but the overall import profit was poor.
Shipments from bonded zone inventories remained low as large sellers were liquidating inventories. In this scenario, the decline in bonded zone inventories slowed down further as expected.
Copper inventories in the bonded zone should grow slightly next week. From this weekend to next week, arriving shipments under bill of lading will increase, while some cargoes will go to Zhejiang due to import subsidy policy. This will limit the stock accumulation in the Shanghai bonded zone.
Silicon Inventory Increased Slightly This Week
According to SMM statistics, the social inventory of silicon metal in the three places totaled 119,000 mt as of April 21, an increase of 1,000 mt from the previous week. In Tianjin, the inventory declined slightly amid few arrivals and good shipments. The inventory of Huangpu Port increased amid rising arrivals. In Kunming, the recent transactions were still active but the delivery was limited, hence the inventory remained stable. Therefore, the total social inventory in the three places increased slightly.
Bonded Zone Inventory of Nickel Stays Unchanged from April 14
As of April 21, bonded zone inventory of 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. According to SMM research, some companies have signed long-term contracts in 2023, and it is expected that the amount of imported pure nickel arriving at ports will increase in the future.
Nickel Ore Inventories at Chinese Ports up 169,000 wmt WoW
As of April 21, port inventories of nickel ore in China stood at 6.72 million wmt, up 169,000 wmt WoW. The total Ni content was 53,000 mt. The port inventory across seven major Chinese ports totalled 3.33 million wmt, 59,000 wmt higher than the previous week. NPI prices rose to 1,100 yuan/mt on stable ore prices, which encouraged downstream purchases but suppressed the traders’ willingness to ship spots. The port inventory may maintain an upward track in the near future.
