Silver Prices Fluctuate and Consolidate, Pre-Holiday Consumption Weakens, Spot Premiums Adjust [SMM Daily Review]

Silver prices consolidated with volatility and edged lower today. As the Chinese New Year holiday approaches, downstream consumers have begun holidays successively, leading to weaker market consumption. In Shanghai, suppliers maintained relatively firm quotations. In the morning session, they quoted at premiums of 2,500-2,800 yuan/kg against TD but were reluctant to sell amid a wait-and-see sentiment. Given the difficulty in concluding deals at high premiums and the high risks of holding goods during the holiday, some suppliers lowered their offers to premiums of 2,000-2,500 yuan/kg against TD or premiums of 1,000-1,500 yuan/kg against the 2604 contract, with only small volumes traded. In South China, smelters adjusted their quotations for cargoes self-picked up from production site to premiums of 500-1,000 yuan/kg against the 2604 contract. However, investment demand in Shenzhen and pre-holiday stockpiling have largely concluded, resulting in thin market activity. Some traders noted that premiums in Shenzhen declined faster than those in Shanghai. With a strong wait-and-see sentiment prevailing before the holiday, actual transactions gradually shrank.