As copper prices climbed consistently this week, downstream consumption was suppressed, leading to a continued increase in social inventory of electrolytic copper in China's major markets.
According to price data from July 30 to August 6, total inventory of electrolytic copper in domestic markets stood at 132,100 tonnes, up 7,500 tonnes from the July 30 level and 4,400 tonnes higher than the August 3 figure. In Shanghai, inventory reached 89,300 tonnes, increasing by 3,200 tonnes from July 30 and 2,500 tonnes from August 3. Guangdong saw inventory of 18,900 tonnes, rising by 1,900 tonnes and 1,000 tonnes over the same periods, while Jiangsu inventory was 19,900 tonnes, up 1,200 tonnes and 300 tonnes respectively.
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Shanghai's social inventory continued to show a build-up trend this week. As imported copper still arrived at ports, combined with the continuous rise in copper prices, downstream consumption was restrained, limiting warehouse outflows. However, domestic supply remained relatively low, preventing a significant increase in warehouse inflows, which kept the pace of inventory accumulation modest. Looking ahead, severe port congestion in Shanghai, along with slow loading and unloading due to high temperatures at some warehouses, has led to prolonged waiting times. Some importers report delays of 5 to 10 days for unloading, slowing the pace of customs clearance and inflow of imported copper. Additionally, the weak import ratio and widening import losses have created uncertainty about the replenishment of future imported copper. With some smelters planning exports, domestic supply is expected to remain limited, making it difficult to see a notable increase in warehouse inflows. However, given the high copper prices, downstream consumption is also constrained, so social inventory is likely to continue a modest accumulation trend in the short term.
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Inventory in the Guangdong market also showed a build-up. Smelter shipments remained relatively low, but the high copper price environment weakened procurement demand from downstream enterprises, limiting warehouse outflows. Due to the significant weakening of the import ratio, some smelters plan to export in the future, leading to continued low market arrivals. Yet, with copper prices staying high, downstream consumption is unlikely to improve, leaving overall inventory changes potentially limited.
Bonded zone inventory
In the Shanghai and Guangdong bonded zones, total inventory of electrolytic copper amounted to 27,900 tonnes as of this week, down 3,800 tonnes from July 30 and 4,400 tonnes from August 3. Shanghai's bonded zone held 25,000 tonnes, a decrease of 4,500 tonnes from July 30 and 4,800 tonnes from August 3, while Guangdong's bonded zone held 2,900 tonnes, an increase of 700 tonnes and 400 tonnes over the same periods. Bonded zone inventory first increased and then decreased during the week. Some cargoes were cleared through customs for import into the country, and the widening CL arbitrage spread prompted traders to engage in re-export activities, leading to the decline. Looking ahead, with the import ratio weakening significantly and domestic smelters expecting to export, incoming shipments are likely to increase, which may cause bonded zone inventory to rise.
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