UPDATE: New Silver Supply Is Drying Up Faster Than Death Valley Jeff Clark, Senior Analyst, GoldSilver.com JUN 22, 2020 The annual data for silver supply is in, and it shows that the structural decline in new supply for the silver market has strengthened. It is not temporary, and can’t be easily resolved or reversed.
The main issue is the deterioration in mine production, although scrap sources are falling as well. This is important because much of the bullion you and I buy comes from newly-mined silver. Secondary sales (bullion products that have been previously bought and sold) will always have a place in the industry, but to be prepared for the kind of rush Mike Maloney sees ahead, mine production will need to be healthy and rising. It is neither of those things, as you’ll see.
Let’s take a look at what is happening to the silver mining industry, as well as other supply sources. As you read through the research, see if you can identify the one and only factor that can reverse this situation…
Silver Mine Production According to CPM Group, global mine production fell for the fourth consecutive year in 2019. This was before Covid-19 struck and temporarily shuttered operations, so a further decline this year is already baked in the cake. Most estimates I’ve seen are for silver mine output to drop by at least 10% in 2020.
Mine production from primary silver companies also fell last year, by 3.8%. It, too, is expected to drop by double digits this year.
Add it all up and you get a picture of mine supply that looks like this.
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Poster Comment:
Good charts at source.