Mine Production Can’t Keep Up with Silver Demand

Part II to a previous post “Is there a Silver Shortage?” explores the phenomenon of silver mining production’s inability to keep up with rising silver demand and the effect this has on silver as an investment.

The second major issue in the present silver market is mine supply. Silver mine production has actually increased 33% since 1999 globally. This is largely due to the rising price of silver which has allowed companies to ramp up production in order to bring more metal to the market. As this has been occurring the total demand has also been rising. We see the correlation between the two in the chart below.

As miners continue to excavate more silver the total global demand increases at an even greater rate in anticipation. This creates a gap that is largely filled by scrap silver coming to the market. The issue with scrap metal is that as scrap is approximately 20% of the total silver supply, many of the newer applications of silver are difficult to reclaim.

What does this mean exactly? Many applications, such as biocides and nanotechnology, contain such small amounts of silver that is not economy viable to recapture the scrap silver metal from them after their usage wears out. Larger applications such as solar panels have a 20-30 year life so this means a long wait to reclaim it’s silver. More than half of the silver in TV’s, cell phones, computers and other electronics ends up in landfills. These examples demonstrate how much silver we are unable to recover and how this adds to the scarcity of silver in relation to it’s demand. While many wait for more effective recovery programs the reality is that an increasing portion of consumed silver will not return to market anytime soon. Get your silver now while it’s available.

» Contact Cornerstone Asset Metals today to learn more about buying silver as an investment.

Past performance is not an indication of future potential values.