Silver Mine Production Drops For First Time In 14 Years - Study
(Kitco News) - (New York City) Global silver mine production in 2016 recorded its first decline since 2002, largely the result of lower by-product output from the lead/zinc and gold sectors – this according to the latest study by an organization committed to the metal’s cause, the Silver Institute.
The institute said that silver scrap supply to the market posted its lowest level since 1996; total silver supply decreased by 32.6 million ounces in 2016.
These findings, and other key components of the silver market, are discussed in the World Silver Survey 2017, released today by the Silver Institute and produced by the GFMS Team at Thomson Reuters (GFMS).
“Global silver mine production declined by 0.6 percent in 2016 to a total of 885.8 Moz. A large proportion of the drop was attributable to the lead/zinc and gold sectors, where production dipped by a combined 15.9 Moz,” the institute study said.
The majority of the world's primary silver supply comes as a by-product of mining for gold and base metals, meaning rises or falls in production of these metals have a major impact on silver output.
The study noted that Mexico registered the largest drop in production last year, followed by Australia and Argentina, yet those losses were partially offset by gains in Central and South America and Asia.
In 2016, the annual average silver price posted a 9.3 percent increase, its first rise since 2011, the study reported. “The average price last year, at US$17.14, registered 28 percent higher than 2007, when the silver price averaged US$13.38,” it found. GFMS is projecting an annual silver average price forecast in 2017 of $18.70/oz.
For the past month the silver market has seen significant selling pressure, giving up most of its gains seen at the start of the year. July Comex silver futures last traded at $16.32 an ounce, up 0.70% on the day.
Silver demand in the solar sector surged 34 percent, driven by a 49 percent increase in global solar panel prices and a build-up of stocks. This is the largest growth since 2010, the study noted.
However, silver’s use in electrical and electronic applications fell last year, “victims of a still sluggish global economy,” the study noted.