Here Are Shanghai Metals Market’s Weekly Update On Chinese Metal Inventories

The week of 30 March 2023 saw some intriguing changes in the Chinese metal markets. Let’s explore the most recent information on the social stocks for aluminium ingots, copper, and zinc ingots in detail and their impact on buyers across the Chinese markets. 

Aluminium Ingot Social Inventories Decline

Aluminium ingot social stocks in China’s eight main markets stood at 1.09 million mt as of 30 March 2023, down 38,000 mt from a week earlier and 20,000 mt from 27 March 2023. When compared to the same time last year, the amount was up 46,000 mt since the week of 20 March 2023-26 March 2023, when a loss of 85,000 mt was reported. The weekly decline has slowed down considerably. Because of the high aluminium prices, the slow growth in downstream operating rates, and a lack of trust in upcoming orders, downstream buyers are being wary of making purchases.

Copper Inventory Increase

SMM copper inventory in the main Chinese marketplaces as of March 31 was 201,900 mt, an increase of 9,600 from the last week. Only 5,300 mt were added to the overall inventories from pre-CNY levels, ending four weeks of destocking. Most regions saw a rise in copper inventories. The lack of cash at the month’s close and the ongoing increase in copper prices reduced downstream buyer interest. The increase in inventory was also caused by the surge of imported copper in Shanghai. 

Zinc Ingot Inventory Down

As of 31 March 2023, social stocks of zinc ingots in seven important Chinese markets totalled 151,900 mt, down 3,500 mt from the previous week and 500 mt from 27 March 2023. The primary basis for downstream purchases was a rigid demand constrained by high zinc prices. Market entries in Guangdong decreased week-over-week due to low premiums. When fresh orders were scarce, downstream buyers were reluctant to restock, so Guangdong’s inventory remained largely unchanged. 

Insight

In the last week of March 2023, the production of aluminium ingots, which is anticipated to prolong the destocking into April 2023, could be threatened by output cuts by smelters and an increase in the share of molten aluminium. The total copper supply is anticipated to rise, and the customs clearance of imported copper would increase further the following week. Zinc inventory across seven significant marketplaces in Shanghai, Guangdong, and Tianjin decreased by 1,100 mt.