Singapore 23/09/2016 - Deliverable copper stocks at SHFE warehouses fell 5,549 tonnes or 4.1 percent from last Wednesday to 130,780 tonnes as of September 23, according to data from the exchange.
This is the sixth straight week of decline for copper inventories in Shanghai Futures Exchange-registered warehouses - inventory has fallen 25.1 percent or 43,783 tonnes over the past six weeks. This week, Qisheng in Shanghai saw the most stock exits - 2,535 tonnes left its sheds.
SHFE copper stocks have been falling in line with increased copper exports from China, which was evident in the recent increase in stocks in LME-listed Asian warehouses, sources said.
While stock arrivals in the LME warehouses subsided earlier in September, deliveries appear to have restarted again, rising a net 10,825 tonnes on Friday. The majority went into Busan, Gwangyang and Port Klang. This is on top of the more than 100,000 tonnes of copper inventories that have been delivered to Asian locations since the start of August.
There are also signs of improving demand from downstream users, a Shanghai-based copper analyst said. "We noticed recently an increase in stock flows both in and out among domestic warehouses," he added. The September-October period is usually peak demand season in China.
Meanwhile, SHFE zinc stocks fell 10,041 tonnes or 5.4 percent week-on-week to 175,272 tonnes as of September 23, making this the ninth straight week of decline. This is also the largest decrease in the past nine weeks.
Inventories have dipped 35,857 tonnes or 17 percent cumulatively since the week of July 25. Stock levels are likely to continue to trend lower due to tightening ore supply, analysts said, but most agreed that the tightness has yet to show up in the refined zinc market.
For aluminium, SHFE stocks fell 15,361 tonnes or 13 percent week-on-week to 103,077 tonnes as of September 23, making it the second straight week of increase. Before the declines, stocks had risen for two consecutive weeks, which was in line with expectations given production restarts and new capacity commissioning in the country.
But stocks have eased, while the SHFE aluminium price remain in backwardation since late April due to temporary tightness in the domestic market while logistics and transport were complicated by mid-Autumn festival holidays late last week. China is also preparing for its week-long national day holidays from October 3.
The backwardation in the spreads between the SHFE October contract and December contract was 460 yuan at Friday's close.
In the other metals, lead stocks slipped 6,894 tonnes to 33,576 tonnes and nickel inventories decreased 345 tonnes to 111,733 tonnes. Tin stocks edged six tonnes lower to 3,627 tonnes.
SHFE published its stock data last Wednesday instead of Friday due to the mid-autumn festival holiday.
(Editing by Mark Shaw)