According SMM Statistics, China’s 1# silver output was 1,350.7,887 mt (including 924.7,887 mt of mineral silver), up 68.8,557 mt or 5.4% MoM but down 1.5% YoY. The reasons for the increase in output were: 1 Some makers resumed operation from maintenance. 2. Raw material suppliers’ enthusiasm for shipments increased. Underpinned by rising prices, smelters purchased more raw materials, thereby increasing output. 3. Silver content in associated ores hiked. At the same time, there were also companies that reduced production. The reasons for the reduction were: 1. The production need to keep pace with this year’s annual production plan. 2. The silver content in raw materials ore became less. 3. Enterprises suspended production for maintenance. Under this circumstance, the overall silver output in November trended up. Towards the end of the year, with the completion of annual production targets and high silver price, the pressure on downstream sectors to purchase raw material ores was also increasing, so SMM expected silver production to decrease in December.
The Fed's speech in December lowered market expectations of an interest rate cut. However, silver prices remained high for a period of time after rising at the end of November, and hovered around 6,000-6,200 yuan/kg for a week before hiking over 6,200 yuan/mt on December 4, exceeding market expectations. The rise in domestic silver prices was mainly caused by ample liquidity. The silver prices started dipping to 5,800 yuan/kg from 6,200 yuan/kg, and then rebounded, but will probably keep declining in the future.
