Expectations of an Interest Rate Cut and Geopolitical Tensions Boost Silver Prices Spot Trading Recovers After Retreating From Highs [SMM Weekly Silver Market Review]

On the macro front, expectations for US Fed interest rate cuts intensified, coupled with unexpected events such as heightened tensions in the Middle East, boosting gold prices to break through sideways movement and fluctuate upward. Silver surged significantly in this atmosphere, and after gold and silver prices broke through key technical levels, they pulled back for consolidation. On Wednesday evening, Fed Chairman Powell's speech indicated that the day's interest rate cut was a risk management decision and that there was no need for rapid adjustments to interest rates, which cooled market sentiment.

[Economic Data]

Negative: US seasonally adjusted CPI month-on-month for August actual: 0.4%, previous: 0.20%, expected: 0.30%

Positive: US EIA crude oil inventory for the week ending September 12 actual: -9.285 million barrels, previous: 3.939 million barrels, expected: -857,000 barrels

[Spot Market] In the silver spot market, downstream buyers were cautious and hesitant to purchase at the beginning of the week due to the sharp rise in silver prices, while some smelters reduced domestic supply due to demand from processing trade export orders. At the start of the week, both supply and demand in the spot market declined. Apart from a few speculators selling at high discounts, most suppliers held back from selling due to hedging costs and other reasons, adopting a wait-and-see approach. In terms of spot premiums/discounts, the premium for national standard silver ingot warrants in Shanghai against TD adjusted to 2-5 yuan/kg, or a discount of 15-18 yuan/kg against the SHFE silver 2510 contract. On Thursday, silver prices pulled back and closed, and downstream end-users became more active in procuring at fixed prices, with transactions generally concluded at premiums. Compared to the Shanghai market, consumption in Shenzhen was relatively sluggish, with suppliers offering discounts of 20 yuan/kg against the SHFE silver 2510 contract. This week, spot market circulation was relatively tight. With silver prices at historically absolute highs, market wait-and-see sentiment was strong, and downstream just-in-time procurement was observed. After the silver price pullback, it is expected that end-user stockpiling ahead of the holiday will still see an increase next week.

PV silver paste: This week, the reference average price for solar cell rear-side silver paste was 6,355-6,518 yuan/kg; for solar cell front-side finger, the reference average price was 9,566-9,812 yuan/kg; for solar cell front-side busbar, the reference average price was 9,516-9,762 yuan/kg.