Silver Prices Continue Upward Trend, Suppliers Hold Back on Sales Amid Rising Premiums [SMM Daily Review]

Silver prices surged significantly today, with the backwardation structure expanding for SHFE silver contracts 2602-2604. The domestic spot market supply tightened once again. As month-end approached, most suppliers completed sales of cargoes with invoices dated this month and month-end inventory clearance, leading to even tighter availability of circulating cargoes in the market. In the morning session, large-scale silver ingot suppliers in Shanghai quoted premiums adjusted higher to 500-600 yuan/kg against TD or 800 yuan/kg against SHFE silver contract 2604. A few suppliers held back sales and adopted a wait-and-see stance, quoting premiums of 600-800 yuan/kg against TD. In the Shenzhen market, seller quotations varied widely. Although premiums for industrial rigid demand purchases could still be negotiated down to 600-800 yuan/kg, it was understood that the premium for silver ingot raw materials ordered through jewelry material supplier channels had already exceeded 1,000 yuan/kg. Despite the exchange repeatedly increasing margin requirements and position limits for silver futures contracts, the tight spot supply situation still poses a squeeze risk for the current month SHFE silver futures contract. The rapid rise in silver prices in the short term, combined with sellers holding back sales, has led to a strong wait-and-see sentiment among silver processing enterprises in the spot market. Some enterprises suspended product quotations and cautiously adopted a wait-and-see approach, resulting in market transactions being slightly weaker compared to yesterday.