As of Monday, August 12, SMM reported that copper stocks in major regions across the country fell sharply by 19,600 mt WoW to 318,800 mt, marking the largest decline in recent weeks. However, total stocks were still 236,200 mt higher YoY compared to 82,600 mt last year. Specifically, stocks in Shanghai were 165,900 mt higher YoY, Guangdong 36,800 mt higher, and Jiangsu 34,400 mt higher.
In detail, stocks in Shanghai dropped significantly by 15,100 mt WoW to 214,600 mt. Despite a considerable amount of imported copper arriving recently, outflows from warehouses were higher, leading to a noticeable decrease in stocks in this region. Stocks in Jiangsu decreased by 1,300 mt WoW to 37,500 mt, as reduced production at nearby smelters led to fewer arrivals, while consumption remained stable. Stocks in Guangdong fell by 3,000 mt WoW to 60,400 mt, also affected by reduced production at smelters, but consumption steadily increased, as reflected by the rising daily outflows from warehouses in Guangdong.
Looking ahead, we maintain our view from last Friday: according to SMM, imported copper will continue to arrive this week, but domestic supply will decrease due to reduced production at smelters. It is expected that total supply this week will slightly increase WoW. On the downstream consumption side, with copper prices remaining low and many secondary copper rod makers halting production due to new policies, it is anticipated that copper cathode consumption will increase this week. According to SMM copper price forecasts, the operating rate of copper cathode rod makers is expected to recover to 79.82% this week, up 4.93% WoW. Therefore, we believe that this week will see both supply and demand increase, and weekly stocks may decrease again.
