Spot Market and Domestic Inventory Brief Review (February 5, 2026) [SMM Silver Market Weekly Review]

This week, silver prices experienced sharp fluctuations. As the tight supply of physical silver ingots in circulation did not improve, and suppliers' inventories were depleted in January without sufficient replenishment, sellers generally held prices firm and were reluctant to sell. Except for the day when trading hit the limit-down and market premiums/discounts quotations were suspended, spot premiums against TD in the Shanghai market surged by over 1,000 yuan. By Thursday, spot silver ingot prices against TD in Shanghai and Shenzhen had risen to 3,500 yuan/kg, with some suppliers quoting 3,500-4,000 yuan/kg while holding back sales and adopting a wait-and-see approach. It is understood that recent spot silver ingot transactions in the market mainly involved small spot orders from smelters, while trader market quotations decreased significantly. Despite the sharp decline in silver prices, there were no instances of lowered premiums for sales in the Shenzhen market this week. Additionally, according to SMM, due to the significant premium of spot prices in Shanghai over LBMA prices in January, some exported silver ingot brands and semi-manufactured crude silver products began flowing back into the market. However, due to processing cycles and supplier costs, these have not yet entered the market rapidly. Ahead of the Chinese New Year holiday, downstream enterprises primarily engaged in just-in-time procurement. Although demand for point pricing at lower levels increased after the sharp decline in silver prices, actual transactions were constrained by supply limitations. With the approaching holiday and high-risk silver price conditions, both buyers and sellers adopted a cautious wait-and-see stance, resulting in thin trading activity in the spot market.

Inventory side, social inventory of silver continued to decline this week. As limited supplies from smelters were directly shipped to downstream enterprises, and traders had minimal opportunities to purchase and transfer goods into social inventory, social inventory saw almost no inflows. Due to the significant price increase in January, some downstream enterprises that had suspended high-price procurement saw increased demand for restocking at lower levels this week. However, investment demand enthusiasm noticeably decreased compared to before. With circulating spot supplies continuously shrinking, price volatility risks stemming from the low inventory environment persist.