Exclusive: China's silver output stood at 1,182 mt in June

SHANGHAI, Jul 9 (SMM) — According to SMM survey, domestic 1# silver output stood at 1,182 mt (including 1055 mt of mineral silver) in May, up 0.88% from the previous month. The overall output rose slightly, in line with last month's expectation that domestic 1# silver output may still maintain a stable state in June with a slight fluctuation.

As US inflation has risen significantly from May to June, inflation will fall toward the Fed’s target. The US economy is likely to experience the fastest growth rate in recent decades in the second half of the year. Although the US index has slowed its gains in June, it may only be a callback. It is still likely to strengthen in the later period. In addition, the Fed’s interest rate decision is expected to raise interest rates, and the infrastructure plan has also reached a preliminary agreement and other factors. As a result, silver prices fluctuated robustly but obviously biased towards weakness.

Although the weakness in the market makes the market spot transactions appear relatively tepid, the impact on the production of manufacturers is still not affected by the market as a whole. Many manufacturers' substantial reduction in output was due to the maintenance in June, such as Guiyan Platinum Industry, Chifeng Shanjin Silver and Lead and other manufacturers took maintenance in June. However, manufacturers such as Gejiu Lianxing, Jiangxi Longtianyong, and Yanggu Xiangguang Copper have not finished their maintenance since May or even earlier, which continued to affect production. However, although many manufacturers have significantly reduced their supply due to production shutdowns and production cuts, the reason for the slight increase in output in June compared with May is still due to the fact that many manufacturers did not reach production at the beginning of the year before the end of June. In order to complete the plan for the first half of the year, the production was forced to increase substantially in June. Such as Yuntong, Shuikoushan, Shandong Zhaojin, Zhejiang Hongda, Minshan Huaneng High-tech and other manufacturers, the output in June increased significantly in varying degrees, which also hedged against the reduction in silver supply from other manufacturers.

However, the current supply of silver-containing materials, including anode mud, seems to be still tight. Some manufacturers said that although the pricing coefficient of silver-containing materials was not low, there was still a certain profit margin for the manufacturers. Therefore, the willingness to produce in July is still very strong. As far as possible, the output will not be easily reduced. Considering that many manufacturers’ maintenance this month will have a continuation effect, production will not fully return to normal levels in July, and even manufacturers such as Jiangxi Longtianyong and Gejiu Lianxing may not be able to resume work smoothly. In addition, July is the beginning of the second half of the year again, and there is a buffer effect. It is expected that China's silver output may drop slightly in July, but the overall reduction will not be too large.