China and Silver Dore

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swsprime's picture
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China and Silver Dore

Dore: The semi-refined Precious Metal ingots that are produced by miners and sent on to refiners for purification.

Frank Veneroso did an excellent analysis showing why world Gold and Silver data is incorrect.  The problem is that the market is very opaque, and reliable data is scarce.

So the statistics we get on world silver production and consumption are very basic in terms of their collection and analysis. Basically published annual mine output from each country is collected, then similar data of world consumption in terms of industrial use, jewelry and investment is collected and the statistics are produced. This doesn't show the flow of the metal around the globe.

China is a big Gold and Silver world market factor.  It has historically been an exporter of silver, and last year it began importing silver.  This event is is of huge significance that many people do not yet appreciate.

China now accounts for over 90% of the refining of Silver Dore in the world. China has made it's Silver Refining so cheap that producers can transport thousands of tons of this part refined metal to China and then ship on the refined product to other places cheaper than getting it refined locally.

So what if China says to Dore producers ' let us buy at market prices all the final product you do not need to re-export from China?' This would suit the producers - no onward transportation costs or storage costs, and it would certainly suit China as it would be buying huge amounts of Silver off market, and it would not immediately escalate the market price. This would certainly be a medium term huge squeeze on available Silver resources if it was done for just a few years. We know that China is encouraging it's citizens to buy Gold and Silver as investments, so why shouldn't it do this too? It would be such an obvious thing to do.

Does this make make sense? It could have gone on for years already completely under the radar of world PM statistic collectors and it might explain the huge drop in current market stocks, but more importantly, what would be the effect on future Silver Prices if what I suspect is happening?

Edited by admin on 11/08/2014 - 06:09
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