High Silver Prices in April, Export Enthusiasm Unabated [SMM Analysis]

In April 2024, China's exports of semi-finished silver with a purity of ≥99.99% were 0.02205 mt; exports of unrefined silver with a purity of ≥99.99% were 368.217417 mt, up 1.5% MoM, down 11% YoY.

Nearly 99% of exports were through processing trade, compared to about 97.5% in March. The increase in the proportion of exports through processing trade was mainly due to high silver prices. Silver, often associated with lead, copper, and zinc, became a strong motivator for purchasing high-value silver as a by-product of bulk metal raw materials. Domestic smelting enterprises were actively procuring imported raw materials, leading to an increase in the volume of processing trade exports. However, imports still faced rising prices and scarce supply, resulting in limited MoM growth in April.

Turmoil in the Middle East heightened market risk aversion, pushing silver prices up for the first three weeks of April. Mining companies and purchasing enterprises were relatively accepting of the prices. Prices are expected to continue rising throughout the year, limiting export volumes due to raw material constraints. In H1 2023, the market was still in a rate-cutting environment. The price surge in April 2023 due to bank collapses led domestic smelting enterprises to seize the rare opportunity for aggressive exports, resulting in a YoY decline in April's export volumes.