China Silver nitrate output in October and forecast for November

As silver futures market was closed during the National Day holiday, silver nitrate producers worked overtime to meet existing orders, or took a holiday at that time. After the holiday, silver prices hiked to over 5,800 yuan/kg after two straight days of losses in October. Therefore, silver nitrate manufacturers with sales qualifications produced 672 mt of silver nitrate in October, down 9.6% MoM but up 11.6% YoY. The output of the surveyed enterprises accounts for about 80% of the market. Therefore, China’s silver nitrate output totalled about 840 mt. Silver nitrate production in various regions remained stable or declined. The reasons for stable production were: 1. Producers operated at full capacity during the holiday. 2. Changes in silver prices have minimal impact on some producers who undertook processing business. The reasons for the decline in output were: 1. Producers took a few days off during the National Day holiday. 2. Post-holiday silver prices dipped, and downstream demand increased. However, there were few spot silver, made it difficult for silver nitrate companies to make back-to-back transaction. Subsequently, silver prices hiked, leading to less demand from buyers who were in wait-and-see mood. Bearish market sentiment was not strong amid suspension of the Fed’s interest rate hike for the second time in November. In addition, the US economic data mixed. Under this circumstance, SMM predicted that silver prices are unlikely to dip. Moreover, there will be rigid demand from downstream sectors. Therefore, silver nitrate production will keep decreasing in November.