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How Is Silver Downstream Restocking Going amid Violently Fluctuating Silver Prices This Week?
Sep 29, 2022 16:27CST
Source:SMM
Since Ag (T+D) contract will not be trading during the holiday, what will be the factors influencing the prices of silver and other products? How are the downstream sectors performing at present?

SHANGHAI, Sep 29 (SMM) - In the last trading week before the National Day holiday, many Federal Reserve officials sent hawkish signals. Meanwhile, the longs and shorts have been intertwined amid disclosed economic readings and recession fears, and the prices of silver fluctuated violently. Since Ag (T+D) contract will not be trading during the holiday, what will be the factors influencing the prices of silver and other products? How are the downstream sectors performing at present?

Macro front:

Bears: On Tuesday, the total number of annualised new home sales in the United States in August was 685,000 units, higher than the previous value and the expected value. The monthly rate of U.S. durable goods orders in August stood at -0.2%, lower than the previous value and higher than expected. Several Fed officials spoke this week, conveying a strong hawkish sentiment.

Bulls: U.S. existing home sales in August released on Wednesday were -2% month-on-month, lower than the previous value and expectations.

Spot market:

Silver: The price of Ag (T+D) contract fluctuated dramatically this week, but the premium/discount did not change much. The premium/discount of most silver complying national standard was around 0 yuan/kg, while that of silver from mainstream manufacturers was 2 yuan/kg. Some sellers, in an effort to gain cash ahead of the National Day holiday, quoted silver with national standard with discounts. According to SMM research, some traders have been closed for the holiday, and some were trading cargoes to be delivered after the holiday. 

Silver nitrate: According to SMM, silver nitrate manufacturers have recently purchased silver according to their production plans. Since there is no silver futures contract trading during the National Day, the manufacturers could not quote properly. Hence the sales department will be on holiday, but the production will still be on. And the silver price showed a downward trend at the beginning of this week, which boosted downstream demand.

Photovoltaic silver powder: The demand for silver powder was robust amid improving downstream demand and falling silver prices, and the production will be maintained during the National Day holiday. 

Contact: According to SMM, the contract enterprises have begun to make corresponding arrangements for the National Day holiday some time ago. Some raw materials have been processed into finished products for stockpiling purpose, while the raw material inventory is kept at a safe level. 

The demand for photovoltaic silver nitrate and silver powder has improved this week. Domestic silver paste companies are gradually increasing the proportion of domestic silver powder, contributing some additional demand. For the production during the holiday, the silver downstream sectors have completed building stocks of raw materials or even finished products.     
 

Market

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