According to SMM survey, domestic #1 silver output stood at 1,334.3 mt (including 1,052.3 mt of silver produced with ore), a drop of 8.29% month-on-month and 6.77% year-on-year.
Three reasons accounted for the decrease in production: 1. Smelters were shut down for maintenance; 2. The silver content in raw materials was not stable; 3. The silver prices were high in April, growing the cost of anode slime and silver-containing scrap. This reduced the recycling volume. The changes in silver content in raw materials grew output at some producers. Overall, the number of companies whose output decreased in April and the output declines both exceeded the number of companies whose output increased and the output growth. Therefore, domestic silver output in April decreased month-on-month. As silver prices are still fluctuating at a high level in May, SMM predicts that silver production may remain flat in May.
Macro: On May 1, the First Republic Bank of the United States announced its bankruptcy. Although it was subsequently taken over, the market panic was still relatively strong. On May 4, the Federal Reserve announced a rate hike of 25 basis points. The prices of silver rose as the rate hike was in line with market expectations and the risk aversion of market traders was strong. The US April unemployment rate was 3.4%, lower than the previous value of 3.5% and the expected value of 3.6%; the US seasonally adjusted non-farm payrolls in April were 253,000, lower than the previous reading of 236,000 and the expected 180,000. Negative economic data caused silver prices to fall. The price of silver was then mainly affected by the macroeconomic data, so the market will pay more attention to the changes in the economic data. SMM expects that silver prices will fluctuate at highs in May.
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