SHANGHAI, Oct 21 (SMM) - This is a roundup of China's metals weekly inventory as of October 21.
SMM Updates on China Aluminium Ingot and Billet Social Inventories as of October 20
Aluminium ingot: The aluminium ingot social inventories across China’s eight major markets totalled 636,000 mt as of October 20, down 19,000 mt from a week ago and 321,000 mt from a year ago. The pandemic controls across many regions have slowed transportation and resulted in fewer cargo arrivals, allowing the social inventory to decline. Gongyi and Foshan led the overall decline. Cargo loading and unloading were suspended at the Gongyi Railway Station, Henan. Buyers in the Foshan market stockpiled in large quantities, while cargo arrivals were limited as smelters in south-west China have not yet fully recovered from the previous output cuts. The inventories in Wuxi and Hangzhou saw smaller changes as the arrivals were less affected by the pandemic. The Gongyi Railway Station has begun to restore shipments from October 19, and the shipments from Xinjiang have also recovered. Considering the transport period of 5-7 days, there will be concentrated arrivals at the end of October. However, due to uncertainties over pandemic-related transportation management and control measures, the arrivals and inventory accumulation may be variable.
Aluminium billet: This domestic aluminium billet social inventory dropped 25,700 mt week-on-week to 71,900 mt as of October 20, marking two consecutive weeks of decline. The inventories fell across all the five major regions: Foshan (-16,300 mt), Wuxi (-4,800 mt), Changzhou (-800 mt), Huzhou (-3,500 mt) and Nanchang (-300 mt). The shipments from Yunnan to Guangdong declined due to output cuts by smelters in Yunnan. The pandemic-induced logistics issues resulted in unstable arrivals. However, once the pandemic is brought under control, the arrivals will recover and the inventory return to growth.
Zinc Social Inventory Gained 5,600 mt from this Monday
SMM data shows that the zinc ingot inventories across seven major markets in China totalled 100,000 mt as of October 21, up 5,600 mt from October 17 and up 11,300 mt on a weekly basis. The Shanghai market has seen arrivals of Qilin zinc and Baiyin zinc as well as the inflows of imported zinc ingots of SMC, AZ and KZ. At the same time, some smelters have sent SHFE deliveries to warehouses. As a result, the inventory in Shanghai gained 4,500 mt compared with this Monday. In the Guangdong market, the arrivals were stable but still low. Meanwhile, the outflows of warrants boosted active shipment among most goods holders, and the inventory in Guangdong dropped slightly. The arrivals in the Tianjin market this week were slow due to the pandemic, and the trades in the market declined amid sluggish downstream demand. Therefore, the inventory in Tianjin inched higher. Taken together, inventories in Shanghai, Guangdong and Tianjin added 5,100 mt, and inventories across seven major markets in China gained 5,600 mt.
Copper Inventory in Major Chinese Markets Added 14,800 mt from Monday
As of Friday October 21, SMM copper inventory across major Chinese markets stood at 125,100 mt, up 14,800 mt from Monday and 30,900 mt from last Friday. Compared with the data on Monday, the inventories in various regions of China decreased except those in the east. The inventory this week added 30,400 mt compared with the same period last year when the total inventory stood at 94,700 mt. Among them, the inventory in Shanghai rose 18,200 mt, that in Jiangsu grew 12,100 mt, and that in Guangdong added 3,600 mt. The higher inventory this week is contributed by the slower growth of consumption and the sharp increase in arrivals.
In detail, the inventory in Shanghai added 8,900 mt to 82,800 mt compared with Monday due to the centralised delivery of smelters, the increase in imported copper, and the slower warehouse circulation. The inventory in Guangdong dipped 1,300 mt to 13,500 mt. After the centralised delivery early this week, the arrival of domestic copper (some smelters still proceeded with maintenance) and imported copper was low, while downstream purchases grew.
Looking forward, the arrival of imported and domestic copper will decrease this week. Besides, the total supply and downstream consumption will also drop. SMM believes that the inventory next week will rise somewhat.
Nickel Inventories in Domestic Bonded Zone up 700 mt from October 14
SMM research showed that the bonded zone inventory of nickel added 700 mt to 4,600 mt this week. The inventory of nickel briquette was 1,250 mt, and that of nickel plate was 3,350 mt. Nickel plate inventory grew this week due to the import profits and the rigid demand from downstream companies despite the spot premiums in the bonded zone becoming higher.
Copper Inventories in Domestic Bonded Zones Dipped 3,600 mt from October 14
SMM survey showed that copper inventories in domestic bonded zones fell 3,600 mt from October 14 to 34,500 mt as of October 21. Inventory in the Shanghai bonded zone dipped 4,600 mt to 25,500 mt, and that in the Guangdong bonded zone grew 1,000 mt to 9,000 mt. The import window remained open this week, and the import profits stood at 300-400 yuan/mt. The demand for customs declaration drove the inflow of goods from the bonded warehouses into the domestic market, thus the inventory in Shanghai bonded zone continued to decrease WoW. Inventory in the Guangdong bonded zone rose slightly because of the continuous arrivals of imported copper and the low customs clearance efficiency.
Social Inventories of Silicon Metal may Remain High in the Short Term as the Wet Season Extended
Social inventories of silicon metal across Huangpu port, Kunming city and Tianjin port stood at 122,000 mt as of October 21, flat form last week. The arrival of goods at Tianjin port in north China experienced both decline and increase, but the overall inventory remained stable. Due to the pandemic in Xinjiang, the arrivals of goods were relatively small. The inventory of Huangpu port in south China increased while that of Kunming city declined. The market transactions in Kunming city were few this week, hence the inventory increased as the goods arrived. The operating rates of silicon factories in Sichuan and Yunnan were high as the wet season extended. In this scenario, the overall social inventory of silicon metal may remain high in the short term.
Downstream Restocked in Late October, and Social Inventory of Lead Ingot Fell
The social inventory of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin decreased by 3,000 mt from October 14 and fell 3,100 mt from October 17 to 64,500 mt as of October 21.
According to research, the consumption of lead-acid battery market was acceptable. In addition, in the second half of October, some large-sized enterprises have run out of the goods purchased in the form of long-term orders, and began to purchase in the form of small orders. Although the pandemic in Anhui was lifted this week, the recovery of secondary lead smelters was limited. The downstream supply around Jiangsu, Zhejiang and Shanghai was still insufficient, and downstream enterprises turned to consume goods in the warehouses. Therefore, the social inventory of lead ingots in this region declined. With the ease of the pandemic in Anhui, Yunnan and other places, the supply of primary lead and secondary lead will continue to recover next week. Coupled with the recovery of production after maintenance, the decline of the lead ingot social inventory may slow down with potential increase.
Nickel Ore Inventories at Chinese Ports up 328,000 wmt WoW
As of October 21, port inventories of nickel ore in China added 328,000 wmt to 8.26 million wmt compared with last week. The total Ni content stood at 65,000 mt. Port inventory of nickel ore across seven major Chinese ports stood at 4.47 million wmt, 118,000 wmt higher than last week. NPI plants restocked raw materials in a centralised manner before the rainy season in the Philippines, pushing up the arrivals of NPI at ports. The main mining areas in the south Philippines have entered the rainy season, and it is expected that the port inventory of nickel ore will rise in the short term and then decline. Meanwhile, the rainy season will also support the ore prices to a certain extent.
