China: SHFE copper inventory rises over 45% post holidays

The Shanghai Futures Exchange (SHFE) in China has recently released its weekly inventory report following the mid-autumn holidays. The report shows a significant increase in inventory across non-ferrous commodities. Conversely, SHFE futures prices have witnessed a downward trend w-o-w.

It is worth noting that the market has followed a traditional pattern, with inventory rising due to the week-long holidays and Chinese buyers pausing their purchases last week.

Recent economic data from China indicates that the decline in exports and imports is gradually easing. However, the country still faces the challenge of declining prices amid the real estate sector downturn, which could be the driving factor for base metals as it is one of the key consuming segments.

In September, Chinese banks provided RMB 2.31 trillion ($316.15 billion) in new loans, a notable decrease from RMB 2.47 trillion issued during the same month last year. However, this figure represents an increase from RMB 1.36 trillion issued in August this year, as reported by the People's Bank of China.

Commodity-wise inventories

Copper

Copper stocks in SHFE warehouses jumped sharply by 45.9% to 56,894 t this week from 38,996 t last week. However, copper futures dipped 1.4% w-o-w to RMB 66,956/t ($9,167/t). Stocks at SHFE are the highest since February amid slow demand and increased production.

Aluminium

In SHFE warehouses, aluminium inventories increased significantly by 39.3% w-o-w. Total inventories were assessed at 110,308 t, up from 79,194 t last week. SHFE aluminium futures decreased by 1.6% w-o-w to RMB 19,206/t ($2,629/t).

Notably, it is the highest inflow of material since the beginning of 2023.

Nickel

Nickel stocks continued the uptrend this week to reach 9,312 t from last week's 7,470 t, up 24.7% w-o-w. In contrast, nickel prices inched down by 3.2% w-o-w to RMB 151,020/t ($26,075/t) compared to RMB 156,060/t ($21,365/t) last week. Interestingly, stocks at warehouses is the highest in the last 29 months.

Zinc

Zinc inventories in major SHFE warehouses surged w-o-w by 28.5%. The inventory stood at 41,289 t compared to 32,129 t last week. Meanwhile, future prices fell by 1.4% w-o-w to RMB 21,479/t ($2,940/t).

Lead

Lead inventories rose slightly by 8.1%, reaching 77,197 t against last week's 71,433 t. Lead futures fell by 2.3% w-o-w to RMB 16,499 t ($2,259/t).