China’s domestic commodity futures opened the night session under heavy selling pressure, with precious and base metals leading the declines. Shanghai silver futures plunged more than 13% in the session, while gold slipped just over 2%; copper and tin also fell sharply, with tin tumbling more than 4% and the main tin contract off roughly 5% at CNY 360,430 per tonne.
The rout in silver echoes an earlier intraday collapse in spot markets, where prices plunged more than 15%, and has spilled into investment vehicles: a large onshore silver LOF that recently resumed trading has hit its daily down limit for several sessions. The drop has coincided with broader risk-off mood in global markets — US equity futures were weaker overnight, with the Nasdaq‑100 sliding about 1%, the S&P 500 down roughly 0.7% and the Dow futures off about 0.33%.
Other commodity plays were softer: Shanghai crude futures eased, methanol lost ground and coking coal slipped, underscoring the night session’s across‑the‑board move lower. Traders point to a mix of forced deleveraging in highly leveraged precious‑metals positions, liquidity sensitivity in smaller investment products, and a sudden shift in risk appetite as proximate causes of the sharp moves.
For China’s domestic market structure, this episode highlights the vulnerability of onshore leveraged instruments and physically backed funds to abrupt sentiment reversals. Silver’s dual role as both an industrial metal and a speculative asset makes it particularly volatile; when momentum reverses, thinly traded or highly leveraged products can experience outsized moves that ripple through exchanges and brokerage margin books.
The immediate consequences are practical: margin calls, forced liquidations and further downward pressure on prices in the short term. Downside volatility also raises questions for exchanges and regulators about the adequacy of circuit breakers, margin regimes and disclosure for large investment products that can amplify swings in relatively thin markets.
Looking through a longer lens, traders and corporate buyers should distinguish between a financial‑flow driven correction and changes in physical supply and demand. If the sell‑off is chiefly a liquidity and sentiment event, industrial users of silver and base metals may find buying opportunities once volatility abates; if it signals a deeper shift in risk pricing — for example, a rapid rise in real yields or a sustained contraction in investor demand for precious‑metal exposure — then prices could remain under pressure for longer.