[SMM Analysis] Slight Decline in Silver Powder Production in February

According to the SMM survey, silver powder production in February decreased by 8.3% MoM but was up 5.7% YoY. The MoM decline in February's silver powder production was mainly influenced by multiple factors: Firstly, from the perspective of the production cycle, even excluding the impact of the Chinese New Year holiday, the actual effective production days in February were still three fewer than in January. Secondly, the end-use market showed weak performance, with downstream enterprises in the PV industry chain resuming work slowly after the holiday. Coupled with silver prices being at a relatively high level during the month, the dual pressures led to a simultaneous contraction in corporate procurement orders and inventory replenishment demand. Thirdly, changes in the supply chain rhythm played a role. Before the Chinese New Year holiday, there was a general expectation of stockpiling within the industry. Considering the potential price fluctuation risks after the holiday, some producers had already conducted small-scale raw material stockpiling in January, directly weakening February's market procurement momentum.

The YoY increase was attributed to the fact that, in recent years, the quality of domestic PV silver powder has been approaching that of Japan. Since last year, the industry's demand for "cost reduction and efficiency improvement" has driven an increasingly urgent need for high-quality and cost-effective domestic silver powder. Additionally, before and after last year's Chinese New Year, domestic N-type powder technology was not yet stable. However, after the holiday, rapid technological advancements in China significantly boosted domestic production. This key factor, which had not yet emerged in February last year, contributed to the YoY increase this year.

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