[SMM Analysis] High Tariff Policy Hedging; Demand Recovery After Lantern Festival

After the Chinese New Year holiday ended in February, the market gradually resumed work. Meanwhile, Trump's fluctuating tariff policies on neighboring and other countries, used as a negotiation tool, have been affecting traders' sentiments. Doubts about US gold inventory and other factors have brought risk-averse sentiment to the market. The pressure to short on the capital side was significant. However, as the macro bullish factors were not "black swan" events, silver prices remained volatile at high levels.
Although the official national holiday ended on the seventh day of the Chinese New Year and work resumed on the eighth day, most producers' production departments operated continuously in shifts without stopping. Therefore, many producers gave more holidays to their production departments during the Chinese New Year, and most domestic production departments only officially resumed production after the Lantern Festival, leading to production-driven rigid demand. The high silver prices also suppressed market stockpiling demand. As a result, the market in the first half of the month relied solely on production-driven rigid demand, with overall market feedback indicating very sluggish demand. As enterprises resumed production and operating rates gradually increased, the market began to absorb January's inventory. After the Lantern Festival, the industry chain observed a gradual recovery in downstream demand. However, due to February being an off-season for demand and the suppression of high prices, market demand was not robust.

In March, the market officially resumed operations. With inventory gradually consumed in February, the market is expected to see improved demand in March, traditionally known as the "golden March and silver April" period.

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