Renewed Safe-Haven Demand Drives Silver to New Record Highs, Spot Market Caution Intensifies [SMM Silver Market Weekly Review]

On the macro front, increasing expectations for further interest rate cuts by the US Fed and persistent safe-haven demand amid political uncertainty supported gold to break new highs, with silver prices ending their correction and rebounding strongly again. Additionally, due to significant disagreements between the two parties in the US Congress over the funding bill, if a new funding bill or temporary spending measure is not passed by September 30, the US government will face a shutdown, triggering safe-haven demand for precious metals.

[Economic Data]

Bullish: China's August total electricity consumption YoY: actual 5%, previous 8.6%
US September S&P Global Services PMI preliminary: actual 53.9, previous 54.5, expected 54
US EIA crude oil inventories for the week ending September 19: actual -607,000 barrels, previous -9.285 million barrels, expected 235,000 barrels

[Spot Market] In the silver spot market, as downstream consumers concentrated on stockpiling during the brief price correction last Friday, consumption appeared somewhat sluggish after silver prices hit new highs again this week. The fundamental situation of declining supply and demand in the spot market has not improved, with most suppliers reluctant to sell at a premium due to hedging costs and other reasons. Regarding spot premiums/discounts, in Shanghai, the premium for national standard silver ingot warrants against TD was 5-6 yuan/kg, or a discount of 10-12 yuan/kg against the SHFE silver 2510 contract; in Shenzhen, individual suppliers quoted a discount of 58 yuan/kg against the SHFE silver 2512 contract at the beginning of the week. After silver prices reached new historical highs this week, downstream just-in-time procurement for pre-holiday stockpiling occurred, with market transactions mainly between traders and a strong wait-and-see sentiment prevailing.

PV silver paste: This week's reference average price for solar cell rear-side silver paste was 6,371-6,645 yuan/kg; for solar cell front-side finger, the reference average was 9,591-10,003 yuan/kg; for solar cell front-side busbar, the reference average was 9,541-9,953 yuan/kg.