SHANGHAI, Oct 17 (SMM) - As of Monday October 17, SMM copper inventory across major Chinese markets added 16,100 mt from last Friday to 110,300 mt. The total inventory added 1,200 mt compared with the same period last year when the data was 109,100 mt. The market shall pay close attention to whether the inventory trend will expand. The inventory in all regions of China increased. In detail, the inventory in Shanghai rose by 6,600 mt to 73,900 mt, the inventory in Guangdong added 2,100 mt to 14,800 mt, the inventory in Jiangsu gained 5,000 mt to 13,600 mt, the inventory in Tianjin grew 2,000 mt to 5,000 mt, and the inventories in Chengdu and Chongqing both increased by 200 mt.
The main reason for the increase in inventories over the weekend is that smelters were more willing to ship copper cathode to warehouses for delivery against the wide spread between the SHFE front-month and next-month contracts approaching the delivery of the SHFE 2210 copper contract. The import window has been opened recently, and imported copper has begun to clear customs. Last weekend, Shanghai and Guangdong ports both witnessed arrivals of imported copper. Besides, the downstream consumption in Tianjin is hindered by the pandemic situation, and the inventory keeps rising.
Looking forward, SMM believes that the inventory will increase first and then decrease this week. The inventory will continue to grow as last weekend and this Monday, a lot of copper was shipped to the warehouses and will reach a high on Tuesday. However, the narrow spread between the front-month and next-month contracts after the delivery of the SHFE 2210 contract will boost the downstream restocking, and the inventory will drop by then.
