Spot quotes bottomed out and rallied last week. Sluggish consumption combined with growing inventories lowered spot premiums early last week. At the end of the week, spot premiums rebounded as plunging copper prices boosted downstream stockpiling. As of last Friday, high-quality copper was quoted with premiums of 30 yuan/mt, up 40 yuan/mt from a week earlier, and standard-quality copper was quoted with premiums of 0 yuan/mt, up 40 yuan/mt from a week earlier. Hydro-copper was quoted with discounts of 80 yuan/mt, up 20 yuan/mt.
Last Friday, there was no price spread on standard-quality copper between Shanghai and Guangdong, leaving no opportunity for cargo transfer between the two regions. As of last Friday, total inventories in Guangdong stood at 47,700 mt, a decline of 938 mt from a week earlier. Shipments arrivals in Guangdong added 2,800 mt to 18,600 mt, flat from the weekly average of 19,000 mt for 2022. The nearing of the delivery of the May contract and large spot discounts early last week prompted smelters to ship cargoes aggressively to warehouses. This, combined with customs clearance of some imported copper, increased arriving shipments.
Shipments leaving Guangdong warehouses were 18,900 mt last week, an increase of 10,600 mt from a week earlier, slightly lower than the weekly average of 19,500 mt for 2022. Some plants closed for Labour Day holidays two weeks ago, and most downstream producers resumed normal production last week, driving sharp growth in shipments from Guangdong. The sharp drop in copper prices also accounted for the increase in shipments from Guangdong warehouses.
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