This week (March 6–12), the operating rate of SMM copper wire and cable enterprises was 66.59, up 5.69 points MoM and down 10.62 points YoY. The operating rate steadily rebounded this week, mainly due to a slight correction in copper prices that drove order release, coupled with support from concentrated power grid deliveries, though the current pace of order recovery remained weaker than in the same period last year. By sector, orders from the power segment continued to support enterprise production schedules, orders from the new energy segment also improved, while construction project orders remained weak, dragging on overall operating rates. Inventory side, the correction in copper prices drove enterprises to restock for rigid demand, but as enterprises maintained production schedules, days of raw material inventories fell 0.31 days MoM this week; for finished product inventories, the correction in copper prices boosted downstream consumption, but high copper prices still restrained end-user purchase willingness, so days of finished product inventories fell 0.41 days MoM. Looking ahead to next week, current orders on hand from the power and new energy sectors will continue to provide the main support for production scheduling. SMM expects the operating rate of copper wire and cable next week (March 13–19) to increase 3.45 points MoM to 70.04, down 4.49 points YoY.

SMM March 12 News: Today, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 160 yuan/mt, unchanged from yesterday; standard-quality copper was quoted at a premium of 40 yuan/mt, unchanged from yesterday; SX-EW copper was quoted at a discount of 20 yuan/mt, unchanged from yesterday. The average price of Guangdong #1 copper cathode was 100,595 yuan/mt, down 265 yuan/mt from the previous trading day, and the average price of SX-EW copper was 100,475 yuan/mt, down 265 yuan/mt from the previous trading day. Spot market: Guangdong inventory had declined sharply for three consecutive days, mainly due to an increase in shipments. Current inventory had fallen by 10kt from the year-to-date high. Although inventory continued to fall today, traders and downstream buyers were markedly less active in restocking than yesterday; however, suppliers were unwilling to cut prices to sell, with significant disagreements between buyers and sellers, resulting in poor overall transactions. Today, purchasing sentiment for copper cathode in Guangdong was 2.4, down 0.11 from the previous trading day, and shipment sentiment was 3.3, down 0.27 from the previous trading day (historical data can be queried by logging into the database). Overall, traders and downstream buyers were markedly less active in restocking than yesterday, and spot premiums were unchanged from yesterday.

[SMM Shanghai Spot Copper] Looking ahead to next week, next Monday will be the last trading day of the SHFE copper 2603 contract. According to the SMM #1 copper cathode price assessment methodology, SMM always quotes against the front-month contract. The contango price spread between futures contracts narrowed slightly, and suppliers’ willingness to ship to delivery warehouses weakened somewhat, marginally loosening support for spot premiums. Meanwhile, import losses have narrowed substantially, and there are signs that the import window is about to open. If the window opens, it will bring in cargo from outside China, increasing pressure on spot supply in China and creating potential downward pressure on premiums. On the demand side, downstream enterprises maintained just-in-time procurement, providing some support for prices, but intraday, some downstream enterprises were seen to have limited acceptance of spot cargo with high premiums, with procurement turning more cautious. On the supply side, domestic copper and previously price-locked imported cargo continued to arrive, while social inventory remained high. As SMM always quotes against the front-month contract, the shift in the price spread between futures contracts is expected to result in high premiums against the front-month contract, though this is expected to be corrected on the second trading day. Overall, under the dominance of delivery logic, Shanghai spot copper premiums are expected to remain at elevated levels next Monday.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,044/mt. It touched a high of $13,063.5/mt in early trading, then the center moved lower to a low of $12,929/mt, and finally closed at $12,948.5/mt, down 0.77%. Trading volume came in at 17,000 lots, down 235 lots from the previous trading day; open interest stood at 304,000 lots, up 279 lots from the previous trading day, mainly reflecting an increase in bears' positions overall. Overnight, the most-traded SHFE copper 2604 contract opened at 101,240 yuan/mt. It touched a high of 101,240 yuan/mt at the open, then the center moved lower to a low of 100,560 yuan/mt, and finally closed at 100,860 yuan/mt, down 0.15%. Trading volume came in at 26,000 lots, down 62,000 lots from the previous trading day; open interest stood at 189,000 lots, down 3,320 lots from the previous trading day, mainly reflecting a reduction in bulls' positions overall.

Spot #1 copper cathode in North China was quoted at parity to a premium of 80 yuan/mt against the front-month contract today, with the average premium unchanged from the previous trading day at 40 yuan/mt, and the average transaction price down 155 yuan/mt from the previous trading day to 100,470 yuan/mt.

This week (3.6-3.12), the operating rate of the brass billet industry rose 8.72 percentage points WoW to 51.95%, with industry conditions continuing to rebound . According to enterprise feedback, overall orders were favorable, with Ningbo standing out in particular as order growth was significant and enterprises' production schedules were full; downstream traditional sectors such as hardware accessories and plumbing and sanitary ware had fully resumed work and production, with strong production enthusiasm. Meanwhile, orders from the refrigeration sector remained stable, continuing to support industry demand. In addition, copper prices pulled back to below 100,000 yuan/mt this week, boosting downstream purchase willingness to buy the dip and further driving order growth. Multiple positive factors pushed the operating rate steadily higher. On the inventory side, this week the industry had 4.23 days of raw material inventories and 5.06 days of finished product inventories, both returning to normal levels. Looking ahead to next week (3.13-3.19), enterprises currently had sufficient orders on hand and were all operating at full capacity. Some enterprises that resumed work relatively late after the Chinese New Year were stepping up production and accelerating deliveries. Along with the continued recovery in downstream demand, SMM expects the operating rate of the brass billet industry to increase 2.82 percentage points WoW to 54.77% next week, and the industry's recovery momentum is expected to continue.

SMM, March 12: Guangdong: Spot premiums in the region continued to rise this week. Lower copper prices, coupled with an increase in terminal orders, lifted consumption among copper processing enterprises, driving inventory lower and supporting higher spot premiums. As of Thursday, high-quality copper was quoted at 160 yuan/mt, up 160 yuan/mt from last Thursday; standard-quality copper was quoted at a premium of 40 yuan/mt, up 240 yuan/mt from last Thursday; and SX-EW copper was quoted at a discount of 20 yuan/mt, up 240 yuan/mt from last Thursday. On Thursday, the price spread in standard-quality copper premiums between Shanghai and Guangdong stood at 0 yuan/mt. With the spread relatively small, there was no cross-region cargo transfer. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses was 90,800 mt, down 6,300 mt from last Thursday. Warrants totaled 51,300 mt, down 1,500 mt from last Thursday. As spot cargo supply decreased and discounts turned into premiums, warrants began flowing into the market. Specifically, warehouse arrivals this week were 13,100 mt/week, down 2,500 mt/week WoW and slightly below the annual average of 14,000 mt/week. Arrivals of both imported copper and domestic copper declined WoW this week. Warehouse withdrawals were 20,200 mt/week, up 8,600 mt/week WoW and far above the annual average of 14,200 mt/week. After the Lantern Festival, downstream enterprises fully resumed operations. In addition, many enterprises had not stockpiled much before the holiday, and actively replenished inventory after the holiday while copper prices remained low. Looking ahead to next week, although delivery is approaching, spot cargo has already shifted to premiums. Suppliers are expected to show weaker willingness to deliver cargo to warehouses for delivery, and imported copper arrivals have also not increased. Total supply is expected to be slightly lower than this week. On the demand side, demand is expected to remain at this week's high level. Therefore, inventory is expected to remain in a state where demand exceeds supply next week, with inventory fluctuating lower, and spot premiums are expected to continue rebounding. (The above information is based on market collection and the comprehensive assessment of the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM.)

SMM, March 12: Today in Guangdong, spot premiums and discounts for #1 copper cathode against the front-month contract were reported at 160 yuan/mt, up 10 yuan/mt, for high-quality copper; 40 yuan/mt premium, up 20 yuan/mt, for standard-quality copper; and 20 yuan/mt discount, up 20 yuan/mt, for SX-EW copper. The average price of Guangdong #1 copper cathode was 100,860 yuan/mt, down 475 yuan/mt from the previous trading day, while the average price of SX-EW copper was 100,740 yuan/mt, down 470 yuan/mt from the previous trading day. Spot market: Today, Guangdong inventory continued to decline, with the drop widening, mainly due to increased warehouse withdrawals. As inventory kept falling and copper prices moved lower, suppliers actively held prices firm, and the price of standard-quality copper rose 20 yuan/mt from yesterday. However, downstream enterprises were less active in restocking than yesterday, and suppliers reported greater difficulty in making shipments than yesterday, with overall trading sentiment weaker than yesterday. Today, procurement sentiment for copper cathode in Guangdong was 2.51, down 0.23 from the previous trading day, while shipment sentiment was 3.57, up 0.15 from the previous trading day (historical data is available in the database). Overall, inventory continued to decline and copper prices moved lower, prompting suppliers to actively hold prices firm, but downstream procurement was weaker than yesterday, and overall trading was average.

SMM News, March 5: Data Brief: As of Thursday, March 12, SMM copper inventories in major regions nationwide fell 0.57% WoW from last Thursday, ending the inventory buildup seen over the previous three consecutive weeks; total inventories increased 218,400 mt YoY from the same period last year, while regional performance remained differentiated. By region, copper cathode inventory in Shanghai continued to build up. Although consumption recovered somewhat, inventories still trended upward due to the impact of concentrated arrivals of imported cargoes and delivery factors; in Jiangsu, inventories declined slightly, supported by recovering downstream consumption; in Guangdong, consumption rebounded significantly and warehouse withdrawals increased, with inventories already reaching an inflection point and expected to continue declining going forward. Looking ahead, on the supply side, imported cargoes continued to arrive at port and domestic arrivals remained steady; on the demand side, downstream enterprises fully resumed production, and consumption recovered markedly. Based on the overall supply-demand pattern, supply is expected to remain normal next week while consumption steadily rebounds, and weekly copper cathode inventories are expected to destock somewhat.

In North China today, spot #1 copper cathode was quoted at discounts of 20 yuan/mt to premiums of 100 yuan/mt against the front-month contract, with the average premium up 80 yuan/mt from the previous trading day. The average transaction price was 100,625 yuan/mt, down 610 yuan/mt from the previous trading day.