Tight Supply and 11 Consecutive Drops in Inventory, Spot Premiums Surge Significantly [SMM South China Spot Copper Cathode Weekly Review]

SMM April 17 News: Guangdong Region: This week, the premiums and discounts in the region showed a bottoming out and rebounding trend. At the beginning of the week, due to the approaching delivery and the large price spread between futures contracts, spot premiums experienced significant discounts. After the delivery, with a substantial decrease in inventory, spot premiums stopped falling and rebounded, reaching a recent high. As of Thursday, high-quality copper was quoted at a premium of 150 yuan/mt, up 80 yuan/mt WoW, standard-quality copper was quoted at 100 yuan/mt, up 100 yuan/mt WoW, and SX-EW copper was quoted at a premium of 50 yuan/mt, up 100 yuan/mt WoW. On Thursday, the price spread between standard-quality copper premiums and discounts in Shanghai and Guangdong was 50 yuan/mt higher in Guangdong, with a small spread leaving no room for inter-regional transfers. According to SMM statistics, as of Thursday, the total inventory in Guangdong warehouses was 38,400 mt, down 7,400 mt WoW, and the total warrants were 17,000 mt, down 7,500 mt WoW. Specifically, this week's warehouse arrivals were 9,800 mt/week, slightly up 300 mt/week WoW, far below the annual average (14,000 mt/week). The main reasons for the low arrivals were fewer imported copper arrivals and maintenance activities at surrounding smelters. Outflows from warehouses were 17,200 mt/week, up 3,000 mt/week WoW, higher than the annual average (14,200 mt/week). The small price difference between copper cathode and copper scrap forced end-users to purchase copper cathode instead of secondary copper for production, and downstream companies placed more orders when copper prices pulled back to low levels earlier. Currently, copper processing enterprises are still rushing to fulfill these orders. Looking ahead to next week, although a smelter in the southwest has completed maintenance, it will still take time to resume normal production. It is expected that supply will remain tight next week. In terms of downstream consumption, due to the tight supply of copper scrap, most secondary copper rod enterprises have extremely low capacity utilization rates, forcing cable companies to switch to purchasing copper cathode rods for production, thereby driving the consumption of copper cathode. Therefore, we believe that next week will see a situation of tight supply and increased demand, with weekly inventory continuing to decline and spot premiums expected to remain high. 》Order to view SMM metal spot historical prices

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Tight Supply and 11 Consecutive Drops in Inventory, Spot Premiums Surge Significantly [SMM South China Spot Copper Cathode Weekly Review]

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