Dual Pressure from the US Dollar and US Treasury Bonds Keeps Silver in a Volatile Range, Spot Market Premiums Remain Stubborn [SMM Silver Market Weekly Review]

On the macro front, eased international trade relations reduced market concerns about global economic and trade uncertainties, leading investors to cut allocations to safe-haven assets such as gold and silver. Ahead of the release of the US ADP employment report and the ISM Services PMI, investors remained cautious about selling the US dollar. Relatively high US Treasury yields and a firm US dollar kept silver prices under pressure in the short term. Although medium to long-term uncertainties in the global economy and market expectations for US Fed policy still support upside potential for silver, prices have not yet exited the short-term consolidation phase.

[Economic Data] Bullish: US October ISM Manufacturing PMI came in at 48.7, compared with a previous reading of 49.1 and an expectation of 49.5.

Bearish: US October ADP employment change was 42,000, versus a prior figure of -29,000 and an expected 28,000.

US EIA crude oil inventories for the week ending October 31 increased by 5.202 million barrels, against a previous draw of 6.858 million barrels and an expected build of 603,000 barrels.

[Spot Market] In the domestic silver spot market, spot premiums held steady this week, ending the previous downtrend. Major producers' mainstream quotations for silver ingots remained at a premium of 10-20 yuan/kg against the SHFE silver 2512 contract, or a premium of 35-40 yuan/kg against TD with limited transactions. Suppliers of national standard silver ingots offered at a premium of 5-10 yuan/kg against the SHFE silver 2512 contract. Silver premiums stayed elevated for multiple days, but transmission of these premiums was hindered as end-products like solar cells struggled to pass on price increases. Processing margins for downstream silver nitrate, silver powder, and silver paste were squeezed, downstream consumption was mainly for rigid demand, and coupled with still-limited circulating supply, overall market transactions remained subdued.

PV silver paste: This week, the reference average price for solar cell rear-side silver paste stood at 7,157-7,346 yuan/kg; the reference average for solar cell front-side finger was 10,771-11,053 yuan/kg; and the reference average for solar cell front-side busbar was 10,721-11,003 yuan/kg.