UPDATE 1-China copper inventories near 4-yr high as supply swamps virus-hit demand; steel stocks build slows – by Tom Daly, Min Zhang and Mai Nguyen (Reuters U.S. – March 13, 2020)

https://www.reuters.com/

BEIJING, March 13 (Reuters) – Shanghai Futures Exchange copper inventories rose another 10% in the past week to their highest in almost four years amid signs China’s production is holding up even as demand struggles to recover from the impact of the coronavirus.

Chinese steel stocks, meanwhile, remain at record highs, although the pace of the build has slowed. Inventories of copper CU-STX-SGH climbed by 34,959 tonnes from the previous week to 380,065 tonnes, the exchange said on Friday. That’s the most since March 25, 2016.

The boost comes after Chinese research house Antaike said February copper output in its smelter survey was flat from January at 656,000 tonnes, much higher than expected, and as key metal consuming sectors are slow to return to work.

“Various companies have increased their sales of sulphuric acid,” Antaike said, referring to the byproduct of smelting that copper producers were unable to sell after the virus outbreak, leaving them short of storage space and facing production cuts.

Furthermore, copper concentrate treatment charges AM-CN-CUCONC, a key source of smelter revenue, have jumped 20% since the end of 2019. Charges above $70 a tonne have eased the pressure on smelters, said Antaike, which is forecasting output of around 690,000 tonnes in March.

For the rest of this article: https://www.reuters.com/article/health-coronavirus-china-metals/update-1-china-copper-inventories-near-4-yr-high-as-supply-swamps-virus-hit-demand-steel-stocks-build-slows-idUSL4N2B63VU

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