[SMM Weekly Review] US Tax Increase Confirmed? Silver Continues to Surge

On February 13 local time, US President Trump announced that he had decided to impose "reciprocal tariffs," meaning that the US and its trading partners would levy equal tariff rates on each other. He also considered imposing additional tariffs on countries using VAT systems. Meanwhile, Fed Chairman Powell stated that interest rates would take into account Trump's tariff hikes, leading the market to worry about a potential interest rate cut by the US Fed, which triggered early trading on bullish sentiment.
【Economic Data】:
Bearish: The seasonally adjusted US CPI year-on-year rate for January was reported at 3%, higher than the previous value and the expected value of 2.9%. The seasonally adjusted US CPI month-on-month rate for January was reported at 0.5%, higher than the previous value of 0.4% and the expected value of 0.3%. The initial jobless claims for the week ending February 8 in the US were reported at 213,000, lower than the previous value of 220,000 and the expected value of 215,000.
【Spot Market】:
Silver: This week, the premium/discount quotes for tonnage-grade national standard spot silver ingots with self pick-up in the Shanghai region ranged from -1 to on par with parity. The premium/discount quotes for tonnage-grade large factory silver ingots with self pick-up in the Shanghai region were 2 yuan/kg. At the beginning of the week, due to the high absolute price of silver, downstream purchasing enthusiasm in the market was relatively weak. The spot-futures price spread issue also discouraged market stockpiling, leading to just-in-time procurement after price reductions.
PV: This week, the reference average price for solar cell rear-side silver paste was 5,184-5,290 yuan/kg; the reference average price for solar cell front-side fine grid was 7,811-7,970 yuan/kg; and the reference average price for solar cell front-side main grid was 7,761-7,920 yuan/kg. At the beginning of the week, due to high prices, market purchasing enthusiasm was weak, downstream production was low, and the market mainly relied on inventory consumption. After prices pulled back on Tuesday and Wednesday, the market engaged in just-in-time procurement. As prices surged near the weekend, purchase willingness in the market declined.

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