China: SHFE base metal stocks witness weekly gains; copper surges over 19%

The latest weekly stock report from the Shanghai Futures Exchange (SHFE) indicated that the inventory of base metals in SHFE-registered warehouses saw a collective increases w-o-w. Among these metals, copper experienced the most significant rise in percentage terms.

China's central bank kept its key policy rate steady, withdrawing cash from a medium-term loan operation to maintain currency stability amidst uncertainty about Federal Reserve rate cuts. The move, amid an ambitious 2024 growth target, hints at potential monetary easing measures to support the economy, including a reserve requirement ratio cut.

Additionally, China's new home prices fell for an eighth consecutive month in February, dropping 0.3% m-o-m and 1.4% y-o-y, the largest decline in 13 months. Efforts to revive the property sector include lending boosts and easing purchase curbs in major cities.

Commodity-wise stocks, prices

Copper

Copper stocks in SHFE warehouses witnessed the highest inflows among all base metals. The stocks gained 19.7% to 286,395 t from the previous week's 239,245 t. Similarly, futures were up by 1.7% to RMB 70,276/t ($9,766/t).

Aluminium

Aluminium inventories in SHFE warehouses rose by 12% to 206,417 t, while futures prices witnessed slight uptick to RMB 19,191/t ($2,667/t) for the week. China's record aluminium production in 2023 has led to a surplus in supply, restraining any significant price increases.

Rising inventories in China and LME-registered warehouses spark demand worries. Some analysts link the surge to seasonal trends as consumers gear up for second-quarter consumption.