Hey blabber mouth, SHhhhhhh!
And Stack ON!
Cheers, S. Rex
Hey blabber mouth, SHhhhhhh!
And Stack ON!
Cheers, S. Rex
The main reason hecla's metal production increased so much over the prior year is because their flagship mine was closed most of last year. They are now just up and running close to their normal capacity with the Lucky Friday mine running at close to capacity.
"Mine supply forecast to reach a record in 2014, with output from Guatemala, Mexico, Chile and Peru rising. Mine supply is seen up 3.5% to 868 million ounces. "
"Scrap supply, is expected to fall by 14%, they said. Even with the decline in secondary supply, total supplies will rise 2.9% year over year, to 1.131 billion ounces"
Looks like the supply side is providing plenty of evidence why silver trades at $16 oz today.
...here is the 2014 Silver Survey published by GFMS:
I would call attention to a few main points, though the whole report is interesting:
-Their methodology states that the numbers they are working from a series of INTERVIEWS conducted with various players along the supply chain in a selection of countries (hence the name SILVER SURVEY). Not SILVER DATA REPORT or SILVER AGGREGATE SUPPLY/DEMAND METRICS, but 'survey'. (page 11 of PDF)
- Total LBMA OTC market volume was 2.36M tons, roughly 90 TIMES 2013 mine production. Nothing to see there, move along
- Total silver demand (according to this report) has outstripped supply EVERY SINGLE YEAR SINCE 2004. In 2013 the deficit was 113.3 tons vs. total supply of 978.1 tons, roughly 11.5%.
WRT the press release announcing the "7% drop in global silver demand", there are a few observations as well:
- The authors did not bother to break out their calculators: if you add up the 2014 demand numbers you see:
Coins & Bars: 191.6
Industrial fabrication: 588
Physical demand (as stated in press release): 1,077
Actual sum: 1,015
For projected demand in 2014:
Coins & Bars: 241.6
Industrial fabrication: 577.5
Physical demand (as stated in press release): 1,004.5
Actual sum: 1,066
Demand increase of 55 tons against baseline of 1,015 ==> 5.4% increase
Concurrently, the Silver Institute also seems to think that Industrial demand is increasing (see silverwood's post above):
"According to Metals Focus, silver industrial demand, which accounts for over 50 percent of global demand, is expected to grow 5 percent per year from 2014-2016, outpacing forecasted global GDP growth."
Full report in PDF form here: The Outlook for New Electrical & Electronic Uses of Silver Report
So... which is it, guys?
PS: Just saw Nick Elway beat me to the calculator -- kudos...
is to steer people away from silver.
I do not think this is because he cares for anyone's well-being. He is either a banker, or paid by them to watch blogs. He only posts when he feels a need to negate anything positive said about silver.
Just an observation.
Good video, I suggest others watch it.
"is to steer people away from silver"
I have never told one person to sell and I have never told anyone not to buy. I try to explain why silver trades at $16 oz today, I believe it's based on market fundamentals, you think it manipulation.
When SRSRocco talks about the decline in silver available from scrap one must keep in mind that scrap supply is an elastic inventory and when price is high supply increases while when price is low supply decreases.
People were selling heirloom tea sets and silverware when silver was $40 and more. But at $16 it's just not worth it.
Likewise how many silver eagles would come out of the woodwork at $32 that were bought in the past year?
So just because there isn't much scrap silver supply in the market it doesn't mean that there isn't any silver waiting to be scrapped.
I don't really follow the specifics of the scrap market except to be aware that China is a fairly large importer of our electronic ewaste that has silver contacts and plated components.
Back in the "buy silver crash JP Morgan" days and the bear videos it was often said that a lot of silver ends up in the dump because it is not economical to recover from electronics. However, copper, silver, gold and minor elements are recovered from ewaste.
As long as the ewaste stream exists and becomes more established, that silver is recoverable. I don't know how much of this is separated from sterling scrap in the overall statistics, but it is probably a more consistent source of scrap silver that is less dependent on bullion price compared to people selling grandma's tea set.
From the silver institute;
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Scrap (millions of ounces)
198.6 202.5 206.0 202.9 200.7 199.7 225.5 258.7 252.6 191.8
Silver Price (Average London US$/oz)
6.658 7.312 11.549 13.384 14.989 14.674 20.193 35.119 31.150 23.790
Based on the above data from the silver institute, I don't see any obvious correlation of scrap supply to price. Does anyone have a better explanation for scrap supply versus silver prices? I am guessing scrap is more a function of industrial usage.
Sometimes correlation is easier to see in a graph. Here is the data in a graph.
Price goes up and scrap supply goes up. Price goes down and scrap supply goes down.
The explanation has already been given you and it is not a function of industrial usage.
erewenguy it is obvious from your comments that you don't know much about the 'scrap silver' scene. You may find granny's tea set a humorous example and frankly I did too however granny's bags of pre-1964 coins is serious melt. The point is that individuals will bring forward increasing amounts of scrap silver when the price is high enough. It is an elastic supply.
There is an interesting wrinkle in UK silver stockpiles, though I am missing clear figures on usage/fabrication (in items such as solder, solar panels, etc. which might be produced and exported, but not reported as an export of silver). I am not aware of such large-scale, silver-consuming industries in the UK, but would be happy to learn.
The UK has been amassing a rather large trade deficit in silver since 1998 -- most recent data from November 2014 only shows the numbers through August 2014:
There is a longer piece on the same topic here: Hoarding in the UK (?)