Tightening Supply in China's Silver Spot Market Post-Spring Festival, Premium Prices Edge Up

On February 24th, following the Chinese Spring Festival holiday, the domestic silver spot market in China has shown a tight supply situation, a trend that continues. Suppliers have demonstrated a strong willingness to support prices in transactions, leading to an increase in spot premium prices compared to pre-holiday levels. During the morning trading session, the mainstream transaction price for standard silver ingots showed a premium of 1,800 to 2,000 yuan per kilogram relative to the Shanghai Gold Exchange's silver deferred contract (Ag(T+D)). For small spot transactions with order quantities below 100 kilograms, suppliers typically demand a higher premium range, reflecting intensified competition for silver ingot resources in the market.

The tight supply in the silver spot market primarily stems from slower post-holiday production recovery, coupled with relatively low inventories at some smelters, exacerbating the supply-demand imbalance. Suppliers' increased willingness to support prices has driven the rise in premium prices, which may affect procurement costs for downstream enterprises. Data indicates a premium range of 1,800-2,000 yuan/kg for standard silver ingots, with even higher premiums for small-batch orders, highlighting strong market demand for physical silver.

Overall, tightening supply and rising premium prices in the silver spot market are key characteristics of the current market dynamics. As suppliers continue to support prices, it is expected that the tight supply situation for silver ingots may persist in the short term, with premium prices likely remaining high. Market participants need to closely monitor relevant data changes to prepare for potential price fluctuations.