Silver maintains the backwardation structure and the market is quiet for two weeks before the holiday [SMM Analysis]

At the end of January, the silver futures price ended the backwardation structure which had lasted for almost 2 weeks. At the same time, silver T+D also ended the 14-day short-pay-long deferred fee direction, and appeared long-pay short yesterday. At the same time, domestic silver prices are still rising. In mid-to-late January, the domestic silver price premium appeared to be too high, surpassing spot silver *1.13. As the end of the month and the Chinese New Year are approaching, market trading sentiment has begun to cool down, and the market has begun to prepare for the holidays.

Macroeconomy

Positive: The annual rate of the U.S. core PCE price index in December was 2.9%, lower than the previous value of 3.2% and the expected value of 3.00%; the People's Bank of China will lower the deposit reserve ratio of financial institutions by 0.5 percentage points starting from February 5. This RRR cut will provide the market with long-term liquidity of approximately 1 trillion yuan.

Negative: The U.S. ADP employment number in December was 164,000, higher than the previous value of 101,000, and the expected value of 115,000; the U.S. seasonally adjusted CPI annual rate in late December was 3.4%, higher than the previous value of 3.1% and the expected value of 115,000. The expected value is 3.2%; the monthly seasonally adjusted CPI value in the United States in December was 0.3%, which was 0.1% higher than the previous value and the expected value of 0.2%; the monthly retail sales rate in the United States in December was 0.6%, which was 0.3% higher than the previous value. and expected value of 0.4%.

Spot market

Silver: spot quotes remained firm in January. Premium for large-volume national standard silver ingots in Shanghai was 2-4 yuan/kg, and the quotation of large-volume large-scale silver ingots was 4-6 yuan/kg. In the middle of the month, the downstream began to stock up in advance before the CNY holiday. At the end of the month, the downstream stocking ended. Market demand turned weak, market sentiment for shipments was weak, and premiums and discounts began to decline slightly.

Photovoltaic : The overall price of silver in January was weak and fluctuated rangebound. Stocking was started according to demand.

Other industries : Market stocking began in mid-January. After stocking is completed according to order requirements, at the end of the month, companies began to visit customers or conduct annual meetings and other related activities.