SHANGHAI, Feb 20 (SMM) - As of Monday February 20, copper stocks in mainstream markets tracked by SMM increased 4,500 mt to 329,900 mt compared with Friday February 17. Despite limited arriving shipments of imported copper, downstream consumption has weakened, growing inventories. At present, the total inventory has increased by 133,300 mt compared with 196,600 mt before Chinese New Year holidays. Over the weekend, inventories grew in Guangdong and Chongqing, while those in Shanghai declined. Inventories in the other regions changed little. Inventory in Shanghai decreased by 1,700 mt to 190,900 mt, and inventories in Guangdong increased by 5,200 mt to 64,000 mt. Those in Chongqing increased by 1,000 mt to 11,000 mt.
The reason for the inventory decline in Shanghai over the weekend is that the arrivals of imported copper were still scarce, while the downstream buyers were restocking normally. There will be arrivals of imported copper in the near term. A small inflow of imported copper and more importantly, the poor consumption, have driven a big inventory growth in Guangdong. SMM understood that several copper rod plants stopped production due to overly high finished product inventory. This can be also reflected in the precipitous decline in daily average shipments from Guangdong warehouses.
The market shall pay attention to whether the customs clearance of imported copper will increase. In addition, due to the weakening of downstream demand at the end of the month, we expect that the inventory will continue to increase this week.
