SMM December 31:
Guangdong Region: WoW, spot premiums and discounts in the region stopped falling and rebounded. Although copper cathode inventories in Guangdong continued to increase WoW and downstream purchasing interest remained sluggish, the excessively large discounts prompted some suppliers to start purchasing deliverable supplies for delivery, which drove premiums to rise slightly. As of Thursday, high-quality copper was quoted at a discount of 130 yuan/mt, up 20 yuan/mt WoW; standard-quality copper was quoted at a discount of 200 yuan/mt, up 20 yuan/mt WoW; SX-EW copper was quoted at a discount of 270 yuan/mt, up 20 yuan/mt WoW. On Thursday, the price spread for standard-quality copper premiums and discounts between Shanghai and Guangdong was 50 yuan/mt higher in Guangdong. The relatively small spread resulted in no cross-region goods transfers. According to SMM statistics, as of Thursday, total warehouse inventory in Guangdong reached 36,300 mt, an increase of 12,600 mt WoW, with warrants totaling 15,700 mt, an increase of 7,200 mt WoW. Specifically: warehouse arrivals this week were 18,700 mt/week, an increase of 1,800 mt/week WoW, higher than the annual average (14,000 mt/week). Due to weak downstream consumption, suppliers could only transfer goods to warehouses. Warehouse withdrawals were 6,000 mt/week, a decrease of 2,000 mt/week WoW, significantly lower than the annual average (14,200 mt/week). As copper prices increased substantially, many downstream producers suspended production and are expected to resume production after the New Year's Day holiday.
Looking ahead to next week, as some downstream producers remain suspended, inventory is expected to continue increasing. However, with the delivery date approaching, spot premiums are expected to continue rising, and the situation of large discounts is not expected to recur.
(The above information is based on market collection and comprehensive assessment by the SMM research team. The information provided herein is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace their independent judgment. Any decisions made by clients are unrelated to SMM.)
