#ShanghaiFuturesExchange #MetalInventories #CopperStocks #AluminumTrends #ZincInventory #LeadStocks #NickelSupply #TinInventory
The annual cycle of the Lunar New Year holiday has traditionally led to a surge in metal inventories at the Shanghai Futures Exchange (ShFE), with this year being no exception. The post-holiday inventory spikes, a result of many metal fabricators shutting down while smelters continue operations, have shown a varying impact across different metals.
Copper stood out this year with the most significant seasonal inventory build-up, with ShFE copper stocks skyrocketing from 30,905 metric tons at the end of December to 285,090 tons. This marked the highest exchange inventory level since 2020, a period that also saw a massive inventory spike due to the COVID-19 lockdowns disrupting Chinese manufacturing activity. The considerable increase in copper stocks this year has been attributed to accelerated domestic production growth coupled with a rise in imports. According to Shanghai Metal Market, China’s refined copper output surged by 9.0% year-on-year in the first two months of the year, with imports also climbing by 2.6%.
In contrast, aluminum saw a much more subdued inventory rebuild by historical standards. Stocks of aluminum decreased to 199,757 tons from a year-to-date high of 206,417 tons, indicating a possible peak for this year’s seasonal inventory build-up. This restrained increase in aluminum stocks reinforces the narrative of a tight domestic market, especially when viewed against the backdrop of last year’s high imports.
Zinc inventories closely mirrored the pattern observed in the previous year, while lead stocks remained relatively stable, reflecting the metal’s differing seasonality, largely influenced by northern hemisphere winter months due to its use in car batteries. Interestingly, China’s refined lead exports grew by 62% year-on-year in 2023, reaching the highest annual volume since 2007.
Nickel and tin stocks at ShFE painted a picture of growing inventories, with nickel reaching a four-year high and tin stocks hitting a record peak since the contract’s inception in 2015. This uptick in nickel stocks can be attributed to the commencement of a new generation of Chinese nickel refineries capitalizing on the import of Indonesian raw materials. Meanwhile, tin’s inventory rise alongside a significant increase in refined tin imports last year underscores China’s stockpiling efforts.
As metals play a crucial role in various industries, the fluctuations in their inventories on exchanges like ShFE provide valuable insights into global supply chains and market dynamics. The diverse trends among different metals reflect the complex interplay of production, demand, and international trade that shapes the world’s metal markets.
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