Singapore 15/04/2016 - The Shanghai Futures Exchange (SHFE) has increased its zinc and copper warehouse storage capacities by 10,000 tonnes and 25,000 tonnes respectively as of Friday via the listing of new warehouses and adjusting existing capacities, according to various notices from the exchange.
The exchange has approved the listing of Nanchu Management Group's Foshan warehouse in southern Guangdong to hold up to 20,000 tonnes of copper.
It has also approved a Foshan warehouse in southern Guangdong, managed by the state-owned Guangdong Reserve Bureau, to store up to 20,000 tonnes of zinc.
A Ningbo warehouse in Zhejiang owned by Ningbo Wharf Warehousing Co had its zinc storage capacity increased to 10,000 tonnes from 5,000 tonnes, but that for copper was reduced to 10,000 tonnes from 20,000 tonnes.
The SHFE recently increased its nickel warehouse storage capacity by 32,000 tonnes. That increase was anticipated because of the need to make room for deliveries to meet big short positions for the May contract and following reports of delays in nickel deliveries into some warehouses because they were close to capacity.
But market participants said they have not heard of similar delays in deliveries or near-full storage capacity for other metals.
"The SHFE just wants to be prepared and ensure that its storage capacity remains sufficient," a Shanghai-based futures trader suggested.
With SHFE copper stocks decreasing recently, there is little significance in the increase in copper storage capacity, he added.
Copper stocks at SHFE warehouses dropped 28,983 tonnes or eight percent week-on-week to 331,942 tonnes as of April 15, the fourth consecutive week of decline.
Total copper stocks have fallen 13.7 percent or 62,835 tonnes over the past four weeks although the current inventory level remains close to a historical high.
SHFE copper inventories had surged between mid-January and mid-March due to earlier arbitrage opportunities between Shanghai and London. The arb window has been closed since late-January.
There were 268,925 tonnes of deliverable zinc in SHFE warehouses at of April 15, up 132 tonnes week-on-week.
(Editing by Mark Shaw)