Silver Consumption Drops 30% in July on Seasonal Low Demand

SHANGHAI, Aug. 30 (SMM) – A recent SMM survey on production and sales at domestic silver processors showed a 30% drop for silver consumption to 29,500 kg at surveyed enterprises in July. This survey was conducted among 10 representative silver processors who mainly produce silver solder bar, silver contact and silver powder.

Main reason for the evident drop of silver consumption in July is seasonal low-demand during June, July and August. Most of these enterprises reported rebounding order volumes in August, and silver consumption is believed to have hit its yearly low in July.

In terms of raw material stock, low stocks were reported in large enterprises, those compared to almost zero stocks in small enterprises. As silver price only narrowly fluctuated and silver consumption was weak in July, enterprises with low stocks showed little interest building up their goods storage. Those small enterprises on the other hand failed to purchase due to capital pressure. As most downstream silver processors determine output by sales volumes, their stocks were continuously kept at low levels.

Concerning future price trend, most silver processors said despite a positive long-term outlook, external factors are hard to predict, and silver price will mainly subject to US policies with no impact expected form domestic factors. They also expressed concerns that rapid rising and falling silver prices will both face them with huge risks.