As of Thursday, August 22, SMM reported that copper stocks in major regions across the country fell by 5,400 mt WoW to 283,500 mt, and decreased by 18,100 mt compared to last Thursday, marking the sixth consecutive week of destocking, although the destocking speed has slowed. Compared to Monday's stock changes, the inventory levels varied across different regions, with only Jiangsu showing a slight increase and other regions seeing declines. The total inventory was 209,300 mt higher YoY, with Shanghai 133,300 mt higher, Jiangsu 31,900 mt higher, and Guangdong 43,900 mt higher.
Specifically, Shanghai's inventory decreased by 4,600 mt WoW to 186,400 mt. Although arrivals in Shanghai decreased this week, outflows from warehouses also declined, leading to a slower destocking speed. Jiangsu's inventory slightly increased by 600 mt to 35,500 mt due to a slight increase in arrivals and a decrease in outflows. Guangdong's inventory decreased by 800 mt to 55,900 mt, as arrivals increased and consumption weakened, which is also reflected in the fall back from highs in Guangdong's daily outflows from warehouses.
Looking ahead, we understand that next week's customs clearance volume of imported copper will be higher than this week, but domestic supply will decrease due to production cuts at smelters. Therefore, we expect the total supply next week to be slightly lower than this week. Demand side, with the end of the month approaching and copper prices rebounding, consumption next week is expected to be weaker than this week. Thus, we believe that next week will see a decrease in both supply and demand, with weekly inventory likely to continue decreasing, but at a slower pace.
