Silver Bottoms Out, Market Focuses on Inflation and Geopolitical Risk Hedging [SMM Weekly Review of Silver Market]

The current macroeconomic backdrop supports the continued strengthening of silver. On the one hand, the situation in the Middle East at the beginning of the week boosted the demand for gold and silver as safe-haven assets. On the other hand, investors sought refuge in silver amid the bullish momentum in precious metals driven by concerns over US inflation and deficits. London silver prices regained the 50-day moving average, targeting $34.87/oz, while domestic silver prices stabilized at 8,200 yuan/kg.

[Economic Data] Negative: US EIA crude oil inventories for the week ending May 16 were 1.328 million barrels, compared to the previous week's 3.454 million barrels, and were expected to decrease by 1.277 million barrels.

Silver: This week, macroeconomic factors supported the rebound and strengthening of silver prices. As the week drew to a close, spot premiums offered by suppliers saw a slight decline. Both supply and demand in the domestic spot market decreased. Some smelters suspended domestic spot quotes during the week due to factors such as prioritizing export demand. In the Shanghai region, tonne-scale national standard spot silver ingots available for self pick-up were quoted at a premium of 3-5 yuan/kg over TD, while large smelters' spot silver ingots were quoted at a premium of +5 to +8 yuan/kg over TD. Actual transactions at high premium quotes were relatively difficult this week. In addition, the operating rate of silver nitrate production declined in late May, with downstream demand primarily driven by long-term contract cargo pick-up, and the enthusiasm for spot order purchases significantly waned compared to April.

PV: This week, the average reference price of solar cell rear-side silver paste ranged from 5,289 to 5,406 yuan/kg; the average reference price of solar cell front-side fingers ranged from 7,968 to 8,144 yuan/kg; and the average reference price of solar cell front-side busbars ranged from 7,918 to 8,094 yuan/kg.

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