Silver production in January decreased by 4.2% MoM but increased by 10% YoY. Among the producers, 13 companies reported a decline in production. The decrease was mainly attributed to the upcoming Chinese New Year break, during which companies using recycled silver as raw material either took an early holiday or shut down furnaces earlier. Due to the high costs associated with starting and stopping furnaces, most production departments operated continuously throughout the year with employees taking shifts. As a result, some companies' production departments took an early holiday, while sales departments were also affected. On the other hand, 10 companies reported an increase in production. The increase was due to continuous furnace operation during the Chinese New Year and holiday periods, with staff on duty, as well as a longer production cycle in January compared to December. In the second half of January, downstream companies began their holidays, and traders reduced inventories to prepare for the holiday season, leading to lower market purchasing enthusiasm. Smelters without urgent sales tasks postponed the sale of silver ingots produced in the second half of January until after the holiday, while those with more pressing sales tasks started selling last week and this week. However, due to weak market demand, the selling prices were relatively low. In February, due to the continued impact of the Chinese New Year holiday and a shorter production cycle, production is expected to decline further.
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