Silver Prices Hold Up Well with Widening Price Spreads Between Futures Contracts, Tight Supply of Spot Cargo in the Spot Market Drives Sharp Increase in Premiums [SMM Daily Review]

Silver prices held up well today, with the backwardation structure of the SHFE silver 2602-2604 contracts continuing to widen. Spot market supply remained tight domestically, and some traders mentioned difficulties in picking up goods from TD long position deliveries at the Gold Exchange. After state-owned smelters completed month-end inventory clearance, quoted spot supplies in the market decreased. Following rapid trades in the morning session where Shanghai silver ingot suppliers raised their premiums against TD to 800-1,000 yuan/kg, spot market premiums against TD generally rose above 1,000 yuan/kg. Some suppliers quoted premiums of 1,000 yuan/kg against the SHFE silver 2604 contract. In the Shenzhen market, purchase quotes for silver materials through jewelry channels with small transaction volumes increased to 1,500-1,800 yuan/kg, showing significant disparities in spot market quotes. Sellers in the silver spot market were reluctant to sell, with only small purchases from rigid industrial demand. Some silver powder and silver nitrate enterprises suspended order-taking and adopted a cautious wait-and-see approach due to the sharp rise in premiums. The tight spot supply and unusual price spread between futures contracts still pose a squeeze risk in the SHFE silver front-month futures contract. Downstream buyers were cautious about high prices, leading to thinner market transactions.
Silver Prices Hold Up Well, Price Spread Between Futures Contracts Widens; Spot Market Supply Tight, Premiums Surge