SMM January 23 News:
Guangdong Region: This week, premiums and discounts in this region continued to decline as most downstream enterprises have already gone on holiday, leading to weak purchasing interest. Suppliers had to continuously lower premiums to facilitate sales. Notably, a certain smelter, unable to deliver currently, had to keep reducing prices to sell its products, while deliverable brands maintained firm quotes with relatively small declines. As of Thursday, high-quality copper was quoted at a premium of 0 yuan/mt, unchanged WoW; standard-quality copper was quoted at a discount of 350 yuan/mt, down 250 yuan/mt WoW; hydro copper was quoted at a discount of 430 yuan/mt, down 270 yuan/mt WoW. On Thursday, the price spread of standard-quality copper premiums and discounts between Shanghai and Guangdong was 270 yuan/mt lower in Guangdong. Despite the large price spread, logistics have stalled due to the upcoming long holiday, and there were no inter-regional transfers. According to SMM statistics, as of Thursday, the total inventory in Guangdong was 18,600 mt, an increase of 9,700 mt WoW. Specifically, this week’s arrivals were 18,800 mt/week, an increase of 5,100 mt WoW, significantly higher than the annual average level (14,000 mt/week). Most downstream enterprises have already gone on holiday, leaving upstream smelters to send goods to warehouses for delivery. Outflows from warehouses were 9,100 mt/week, a decrease of 1,100 mt WoW, significantly lower than the annual average level (14,200 mt/week), as only a few downstream processing enterprises were still operating, leading to a sharp decline in demand.
Looking ahead to next week, it is reported that the vast majority of downstream enterprises will begin their holidays this weekend, further reducing demand. Smelters are expected to increase shipments to warehouses. Therefore, we anticipate a scenario of increasing supply and weakening demand next week, with weekly inventory continuing to rise.
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