Silver supply/demand historical and current

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silverwood
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Silver supply/demand historical and current

Hi all, with silver's price action over the past several years I find myself searching  to find some answers to justify these prices from a supply and demand perspective. I believe it would very useful to post these facts and provide the link to where they were obtained. So please let us consolidate this information here.  

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Silver institute

There is wealth of information about silver fundamentals on this site

www.silverinstitute.org

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Local artisans

While I am enjoying my visit here in Sedona my wife and I have been browsing many of the local shops and craft fairs. I observed many of the local artist who craft jewelry and other objects using silver. Jewelry is a large component of the physical silver market. I love to chat with these artisans and ask them about silver. So I had a conversation today with gal over in the Oak Creek Village craft fair. I started to tell her how I felt about the price of silver. I told her that my research is telling me that silver is a compelling value at these price levels because the miners are struggling to make any profits. The ones that can are resorting to survival mode. I said that they do that by high grading their deposits, scaling back their operations and foregoing exploration for new reserves. I also said that the longer these price level remain the effect will be giant squeeze on silver supply. Because of her relation to silver she was very interested in what I was saying. She told me she has been holding off buy silver stocks she uses for her crafts. She said she was wondering when to buy as she also has been watching the silver price from her prospective. I told her silver could move higher from here and that buying now makes good sense as there is  not too much more downside risk.

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A Jeff Christian article of interest

Total Silver Investment May Increase By One Billion Ounces Over the Next Decade

(Washington, D.C. – October 22, 2014) – Investors are likely to increase their net silver purchases in the years ahead, largely due to an ongoing weak global economy, for capital preservation and silver’s pedigree as a leading industrial metal, according to a report released today by the Silver Institute. The report, entitled “Silver Investment Demand,” suggests that investors may accumulate as much as one billion additional ounces of silver in various investment instruments over the next decade. This is on top of the more than 860 million ounces of silver purchased as an investment since 2006.

Other significant points of the “Silver Investment Demand” report include:

  • Investment demand remains the single most important driver of prices in the silver market;
  • The silver market is the second largest of the precious metals markets, behind only gold in terms of the value of metal flowing through the market on an annual basis;
  • The dollar value of the silver market, which includes trading volumes on the major futures and options exchanges and clearing volumes of the London over the counter market, combined with newly refined silver supply, stood at US$5.1 billion in 2013;
  • At the close of 2013, at least 2.3 billion ounces of silver were held in bars and coins around the world;
  • With silver producer mining costs declining, there are strong reasons to expect mining company equities to rise in the near term.  In the long term, investors are likely to benefit from buying silver mining equities; and
  • The silver market, when compared to the gold market, is a much more volatile market and investors are able to receive a much bigger response in the price of silver than that of gold.

The report, produced by the CPM Group, a New York-based metals consultancy, takes a broad look into the components making up silver investment demand, including bullion & coins, futures and options, exchange traded products and silver mining equities. It also examines other important areas of the investment complex and contains an outlook for silver investment demand.

“This timely publication underscores silver’s important role as a trusted investment,” stated Michael DiRienzo, Executive Director of the Silver Institute. “Even in these days of precious metal price volatility, we are seeing areas of growth within the silver investment arena. This year’s progression in silver exchange traded funds, for example, suggests that investors are very keen to acquire and hold the white metal.”

Click this link to download a free copy of the report:  Silver Investment Demand Report

The Silver Institute is a nonprofit international industry association headquartered in Washington, D.C. Established in 1971, the Institute’s members include leading silver producers, prominent silver refiners, manufacturers and dealers.  The Institute serves as the industry’s voice in increasing public understanding of the many uses and value of silver, and also creates programs across many platforms that benefit the white metal. For more information on the Silver Institute, or silver in general, please visit: www.silverinstitute.org.

Contact:
Michael DiRienzo
The Silver Institute
Tel: +1 202-495-4030
e-mail: mdirienzo@silverinstitute.org

Jeff Christian
CPM Group
Tel: +1 212-785-8320
e-mail: jchristian@cpmgroup.com

This entry was posted in Silver Institute Press Releases. Bookmark the permalink.

*note* click on Silver Investment Demand Report  to read Jeff's excellent report

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Mining cost and production analysis

I will be posting a series of youtube videos from a poster named moments in trading.

https://www.youtube.com/user/MomentsInTrading

He has some excellent stuff and will be a great factual info source for the silver investor to understand the supply/demand dynamics.

Sorry, I am the on the hotel computer and it does not let me view youtube videos. I will post these when I return home or if someone finds they like one please post the link here.

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Christian bullish!

Gulp!

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Christian bullish

Jeffrey Christian may be establishment, but he is bullish from time to time.  And he was somewhat bullish in the interview I heard a couple months ago.

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Bullish

At some point, Christian loses credibility to remain bearish, given that at some level the market does respond to fundamentals. Otherwise Christian would have to admit that manipulation trumps fundamentals. the status quo is unwilling to make such an admission. so yes, it is not surprising that he would be bullish at such a time. Well, that's my logic.

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Interesting video if you have a few minutes

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US Mint to Resume Bullion Silver Eagle Sales on Nov. 17

US Mint to Resume Bullion Silver Eagle Sales on Nov. 17

by Rhonda Kay on November 10, 2014 · 6 comments

Stacks of American Eagle silver bullion coins

The United States Mint will resume sales of its most popular bullion product on Nov. 17, 2014

The United States Mint expects to have over one million 2014 American Silver Eagle bullion coins for sale by Nov. 17, according to a memo the agency sent to its authorized distributors.

Since the U.S. Mint cannot produce enough Silver Eagles, the Mint sold out of them after weeks of explosive demand, sales of the 99.9% pure silver coins will resume on a rationed basis.

"As you know, the drop in silver prices has led to significantly increased demand for American Eagle Silver Bullion coins in the last four weeks," the U.S. Mint told its authorized distributors on Monday, Nov. 10.

"We anticipate having over one million 2014-dated American Eagle Silver Bullion Coins available when we go back on sale, on an allocation basis, Monday, November 17th."

At some point, the Mint will no longer strike coins for this year. As a point of reference, the Mint sold its last batch of 2013-dated Silver Eagles on Dec. 9. Buyers then had to wait for five weeks until this year’s version launched on Jan. 13, and quantities were limited until May. Next year’s American Silver Eagles are due out in early January.

Update: Tom Jurkowsky, director of the U.S. Mint’s Office of Corporate Communications, sent CoinNews.net the following statement on Tuesday, Nov. 11:

"The recent volatility in silver prices, with silver dropping to five-year lows in the $15.00 per ounce range, has resulted in an increase in sales of United States Mint American Eagle Silver bullion coins. The weekly average sales of American Eagle Silver bullion increased to 1.16 million ounces in the weeks since October 1, up from 586,000 per week in the July-September quarter. This represents an increase of approximately 98% in a time span of just over one month. Calendar year (CY) to date, the Mint has sold 39,381,000 American Eagle Silver bullion coins. The Mint sold a record 42,675,000 coins in CY 2013.

When bullion demand exceeds the supply of ready-to-ship finished inventory, the Mint institutes a policy to allocate available American Eagle Silver Bullion Coins to its authorized purchaser distribution network. The allocation policy was in effect from January through May of 2014.

Over the last five years, the Mint has dramatically increased the supply of American Eagle Silver bullion coins with the majority of the raw material silver blanks coming from two suppliers-Sunshine Minting and Leach/Garner.

Near the end of every calendar year, the Mint plans the production transition to coins dated with the upcoming year. The Mint began the transition to build inventory of 2015-dated silver bullion earlier this fall. With demand for immediate delivery of 2014-dated coins exceeding supply, we are shifting all resources back to 2014 production."

The United States Mint does not sell bullion American Silver Eagles directly to the public. Instead, they are offered in bulk to "Authorized Purchasers" who buy them at melt value plus a premium of $2 per coin. Bullion coins are usually available to buy for a few percentage points above the spot value of their precious metal content.

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KGHM Silver Production Qty and Costs to Produce

KGHM is the largest copper miner in the world and the 3rd largest silver producer. For the 1st half of 2014 KGHM all in costs to produce silver was $18.05. Please watch this short video as the author does an excellent job.

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Fresnillo Gold and Silver Production Qty, Costs to Produce, and

Fresnillo Gold and Silver Production Qty, Costs to Produce, and Growth. Fresnillo is the worlds largest silver producer. The 1st half of 2014 Fresnillo's all in costs to produce silver was $17.54

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Pan American Q2 Production and Costs to produce Gold and Silver

PAAS 2nd quarter 2014 all in cost to produce silver was $20.13

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I found some interesting

I found some interesting charts posted on another thread and they drew to a very strange observation.

At the risk of crossing forums it's here:

https://www.tfmetalsreport.com/forum/6345/gold-supply-and-demand-will-balance-hold

Thanks to all who are posting the producer's stated costs.   It makes $15 silver look unsustainable yet here we are.

__________________

Swing trade indexed ETFs. Long physical gold, silver, and 1 miner.

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Polymetal Q2 Production and Costs

Polymetals all in cost for the 2nd half of 2014 to produce silver was $16.88 per ounce.

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Gold Corp Q2 Production and Costs

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Weekly View of Gold

I know Trader Dan isn't the most popular guy on this web site. I have followed Dan's posts since his days on jsmineset. I don't always agree with him but I highly respect what he has to say. Below is his current view of the gold market from a technical point of view. Although this is a little off topic to my overall thread's theme, never the less I believe it is important to look at all observations of a market's dynamics and draw your conclusions on them.

http://www.traderdannorcini.blogspot.com/2014/11/weekly-view-of-gold.html

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trader dan

The reason why some don't like TD is because he doesn't buy into this manipulation nonsense that so many retail gold/silver investors have bought into for so long.

At the end of the day, TD has had great track record the last few years, spot on for the most part.

He actually talks about things that most around here hate to talk about, FUNDAMENTALS!!

silverwood
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zman

I agree with you, but there is way too much time spent arguing. IMO, time better spent would be on the research such as I am trying to post and encouraging others to post on this thread. My goal with this thread is to consolidate analysis of silver mostly and gold which is being posted on the web and filter out the noise. There is much out there and it is overwhelming difficult for an individual to discover it on their own. So I invite you to please participate in this...silverwood

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Coeur Mining's 3rd Quarter Results

Coeur = CDE sold silver for $19.46 for the quarter and was unable to make a profit.

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Gold Silver Mining Supply Ratio

In this video we are looking at the gold to silver price ratio and comparing it to the gold to silver mining supply ratio. This is very interesting analysis.

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