Silver prices tumble on Chinese market
2014-12-02 09:56:53 [Print]
BEIJING (Asian Metal) 2 Dec 14 - Dampened by plummet in Loco London Silver last Friday, silver futures tumbled sharply by RMB170/kg (USD0.86/oz) or 5% to RMB3,229/kg (USD16.37/oz) on SHFE on Monday. Dragged down by the sharp decline in silver futures, prices for silver ingot 99.99%min declined by RMB220-230/kg (USD1.12-1.17/oz) to RMB3,210-3,230/kg (USD16.28-16.38/oz) on the Chinese spot market. However, the trading was very slow on the physical market, with both suppliers and buyers watching the market.
A source from a Hunan-based silver ingot smelter reported that as silver prices slumped sharply this Monday, most suppliers were reluctant to sell silver ingot on the spot market. “We ever received an order last Friday but did not conclude the deal, as the buyer lacked of money. The buyer wanted to buy the metal this Monday, but we were reluctant to sell at the declined prices,” said the source. “Silver prices declined by around RMB50-60/kg (USD0.25-0.3/oz) last Friday and plummeted by over RMB200/kg (USD1.01/oz) to around RMB3,210-3,220/kg (USD16.28-16.33/oz) this Monday. We are suffering a loss.”
The smelter is operating with around 30t of silver ingots per month, based on its production capacity of 300tpy. It holds over 20t of the metal in stock.
The source predicted that silver prices may continue to linger at the current low level in the near term but may rebound in the future due to the high cost of raw materials.
A source from a Shanghai-based trading company reported that dampened by the sharp decline in silver futures on SHFE, silver ingot prices slumped by over RMB200/kg (USD1.01/oz) to RMB3,220-3,230/kg (USD16.33-16.38/oz) on the Shanghai spot market, but few deals were concluded. “Some suppliers were watching the market while buyers were cautious about purchasing the metal, scared away by the sharp decline in silver prices,” said the source.
The trader held few silver ingots in stock and did not conclude any deals on Monday. He predicted that silver market may remain on a weak footing in the near term, as the market lacks of favorable news.
Loco London Silver rebounded back significantly by USD1/oz or 6.44% to USD16.45/oz on Monday. Asian Metal predicts that silver ingot prices may bounce up strongly to around RMB3,400/kg (USD17.24/oz) on the Chinese market on Tuesday.
