SHANGHAI, Apr 29 (SMM) - According to General Administration of Customs, the import volume of silver flake (including silver flakes with an average diameter of less than 10 microns and other silver flakes) in March was 8.6 mt, an increase of 32% MoM and a decrease of 61% YoY. The import volume of non-flake silver powder (including non-flake silver powder with an average diameter of less than 3 microns and other non-flake silver powder) in March was 232 mt, a decrease of 19% MoM and an increase of 7.4% YoY.

Silver flake (including silver flakes with an average diameter of less than 10 microns and other silver flakes) is mainly used in electronic paste to make electronic components and other items. Domestic silver flake manufacturers for 5G base stations, mobile phone touch screen, flexible electronics and other directions posted palpable production growth, resulting in a decrease of imports by 61% year-on-year. However, as the domestic silver flake could not fully replace the imports, silver flake importers restocked in advance in March considering transportation restrictions in east China due to the pandemic, hence the imports in March rose 32% MoM.

According to SMM, China's photovoltaic industry mainly uses imported non-flake silver powder from Japan, the United States and South Korea. More than 90% of the domestic positive silver paste manufacturers are still using Japanese silver powder because of its higher production as well as better quality.

In the first quarter, new grid-connected PV capacity stood at 13.21GW, an increase of 147.8% YoY, of which centralised PV and distributed PV power stations capacity were 4.34GW and 8.97GW respectively, generating more demand for non-flake silver powder.

In January and early February, silver prices were low compared to last year, while the silver powder downstream manufacturers were optimistic about demand in the photovoltaic industry, hence many silver paste manufacturers restocked in large amounts. In late February and March, Russia-Ukraine war increased risk aversion demand, and silver prices rose, in which case silver paste manufacturers were less interest in producing. And coupled with stocks built in January and February, silver powder imports fell 19% year-on-year in March.

China's silver powder imports are mainly driven by the demand. In the first quarter, imports of silver powder increased year-on-year. However, affected by the pandemic in April in east China, downstream demand has been hurt, and manufacturers will see rising finished product inventory. It is expected that domestic demand for silver powder will decline in May.