SMM News on May 19:
As of Monday, May 19, copper inventories in SMM's mainstream regions across China increased by 7,200 mt WoW to 139,200 mt, marking the second consecutive Monday of inventory buildup. Compared to the inventory levels on Friday last week, all regions across the country saw an increase in inventories. Total inventories were 263,600 mt lower than the 402,800 mt recorded in the same period last year, with Shanghai's inventories 189,700 mt lower YoY, Guangdong's 36,100 mt lower, and Jiangsu's 32,200 mt lower.
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Specifically, inventories in Shanghai increased by 1,500 mt from Thursday last week to 96,200 mt, while inventories in Jiangsu increased by 4,100 mt to 21,300 mt. Affected by the large price spread between futures contracts, spot premiums surged significantly after the contract rollover. However, downstream restocking was not active in the face of high premiums, and warehouse arrivals also increased compared to before. In Guangdong, inventories rose by 1,300 mt to 14,400 mt, primarily due to increased arrivals and decreased outflows from warehouses, as reflected by the continuous decline in Guangdong's daily average outflows from warehouses.
Outlook: It is reported that both imported and domestically produced copper arrivals are expected to be limited this week, suggesting that total supply will be lower than last week. On the consumption side, downstream consumption is expected to gradually improve as premiums decline after the contract rollover. According to our survey, the weekly operating rate of copper cathode rod is expected to reach 74.87% this week, up 1.61 percentage points WoW and 10.41 percentage points YoY. Therefore, we believe that the week will see a decrease in supply and an increase in demand, with inventories expected to decline slightly during the week.
