SMM News on June 9:
As of Monday, June 9, copper inventories in SMM's mainstream regions across China increased slightly by 700 mt WoW to 149,500 mt. Compared to the inventory changes from last Thursday, only the Shanghai region saw an increase in inventory, while other regions experienced declines. Total inventory was 292,600 mt lower than the 442,100 mt recorded in the same period last year. Specifically, Shanghai's inventory was 198,800 mt lower than the same period last year, Guangdong's was 48,200 mt lower, and Jiangsu's was 45,400 mt lower.
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In detail, inventory in the Shanghai region increased by 4,800 mt from last Thursday to 103,600 mt. Limited domestic copper arrivals over the weekend, coupled with a significant influx of imported copper, were the main reasons for the inventory increase. Inventory in the Jiangsu region decreased by 2,400 mt from last Thursday to 17,300 mt, while inventory in the Guangdong region fell by 1,500 mt to 22,100 mt. The limited domestic copper arrivals in these two regions were influenced by export activities from nearby smelters. Additionally, downstream consumption improved due to lower premiums, as reflected by the continuous increase in Guangdong's daily average outflows from warehouses.
Outlook: It is reported that domestic copper will be exported, while the increase in imported copper will not be significant, suggesting a decline in total supply. On the consumption side, the narrowing of the price spread between futures contracts has driven a rebound in downstream consumption. According to our survey, the weekly operating rate of copper cathode rod is expected to be 77.53% this week, up 2.66 percentage points WoW and 12.79 percentage points YoY. Therefore, we believe that the week will see a decrease in supply and a slight increase in demand, with inventory expected to decline slightly during the week.
