According to SMM, downstream consumer orders for silver nitrate enterprises performed well in early May. However, starting from mid-May, influenced by the end of the installation rush in the domestic PV sector, orders decreased significantly, leading to a decline in the operating rate of silver nitrate. In May, silver nitrate production fell by 17% MoM. Entering June, due to the continued unfavorable outlook for orders in the PV sector, there are no signs of silver nitrate enterprises resuming production in the short term, with the operating rate of some enterprises remaining below 50%. Therefore, it is expected that silver nitrate production in June will remain flat or decline slightly compared to May.
Meanwhile, downstream consumer demand weakened in May, while silver prices remained high and volatile. To maintain production and operations, some enterprises chose to reduce the processing fee for silver nitrate to secure a larger market share. However, some enterprises were reluctant to engage in price competition and planned to maintain the processing fee at a relatively high level of 25-30 yuan per kg, despite the decrease in orders. Influenced by changes in macroeconomic risk appetite, the precious metals market cooled down somewhat in May, with some enterprises choosing to purchase at low prices to alleviate financial pressure. In June, silver prices continued to fluctuate within a volatile range, and silver nitrate enterprises' focus on silver price trends exceeded their attention to adjustments in processing fees. However, the downward trend in total orders has dampened enterprises' enthusiasm for stockpiling, and the market sentiment is characterized by a strong wait-and-see attitude.
