Squeeze Nearing End Amid Geopolitical Easing: Silver Retreats from Highs but Premiums Remain Firm [SMM Silver Market Weekly Review]

On the macro front, news of geopolitical easing and Trump's softening trade stance prompted profit-taking by bulls in the precious metals market. Additionally, Q3 earnings reports from several US banks showed lower-than-expected provisions for loan losses, suggesting some alleviation of the US credit crisis, which also weighed on the precious metals market. The recent pullback in silver prices is more indicative of a "short squeeze ending + high-leverage washout" rather than a trend reversal. The extreme short squeeze is cooling, while the underlying macro logic of "interest rate cuts + reflation" remains unchanged. The absolute level of circulating inventory remains low, and silver prices are expected to hold up well over the medium and long term.

[Economic Data]

Bullish: US EIA crude oil inventories for the week ending October 17: -961,000 barrels (previous: 3.524 million barrels, expected: 1.205 million barrels)

Bearish: Germany September PPI MoM: -0.1% (previous: -0.8%, expected: 0%)

[Spot Market] In the domestic silver spot market, domestic smelters primarily focus on large-ingot exports, leading to persistently tightening market liquidity. Spot premium quotes vary widely, and market consumption remains dominated by just-in-time procurement. This week, there was almost no price difference between national standard silver ingots and large-smelter ingots. In Shanghai, suppliers' premiums against TD rose to 50-70 yuan/kg or 50-60 yuan/kg against the SHFE silver 2512 contract. In Shenzhen, suppliers' premiums against TD increased to 70-90 yuan/kg, but transactions were thin due to limited supply. Facing high spot premiums, downstream end-users maintained just-in-time procurement. This week, small and medium-sized merchants in Shenzhen were cautious about high prices, with stockpiling enthusiasm slightly declining and wait-and-see sentiment prevailing in the market.

PV silver paste: This week, the average reference price for solar cell rear-side silver paste was 7,245-7,788 yuan/kg; for solar cell front-side finger, it was 10,902-11,716 yuan/kg; and for solar cell front-side busbar, it was 10,852-11,666 yuan/kg.