Silver prices hover at lows, premium expectations strengthen amid tight spot cargo balance [SMM Daily Review]

Today, SMM’s 10:00 am price for Shanghai Gold Exchange Ag (T+D) was 16,304 yuan/kg, with the premium/discount range quoted at TD-5 to +5 yuan/kg and an average of 0 yuan/kg.

On the macro front, the cooling of Middle East tensions and the pullback in oil prices provided some support to precious metals, but the market’s short-term focus is shifting from geopolitics to inflation and rate hike logic. US employment data remains resilient, and macro pressures persist. Precious metals are expected to maintain a pattern of wild swings in the near term.

On the spot market, trading has recovered somewhat this week. First, the sharp decline in silver prices stimulated downstream purchase willingness; second, the recovery in solar cell demand in May has gradually transmitted to silver procurement. Downstream inquiries have been relatively active this week, and suppliers’ quotes are gradually shifting to premiums. In Shanghai, morning session quotes were mainly between TD-5 yuan/kg and small premiums, with suppliers holding strong expectations to push premiums higher, but transactions were mostly concentrated near parity. After Monday’s concentrated procurement, consumption weakened relatively today. In other regions, low-priced cargoes have been largely cleared, and market quotes are gradually moving toward parity.

Overall, macro uncertainties are significant, with geopolitical and US economic factors in a tug of war, leaving the direction of precious metals unclear. On the spot market, expectations for an industrial demand recovery in June are strong, and the market is in a tight balance. Going forward, attention should focus on whether new transactions can drive premiums wider.