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Physical silver supply squeeze about to get worse warns Keith Neumeyer

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The global pandemic has shut down several mining jurisdictions around the world, taking off a large chunk of silver production, this according to Keith Neumeyer, CEO of First Majestic Silver.

“In 2018, we produced, as a global industry, 855 million ounces of silver. So far, we’ve had Peru come offline, with 145 million ounces, we’ve had Chile come offline with 42 million ounces, we’ve had Argentina come offline with 26.5 million ounces. That’s a total of 213.5 million ounces that has now been shut down,” Neumeyer told Kitco News.

Neumeyer noted that there exists a fundamental disconnect between the physical market and the paper market for silver.

“For us [miners] to see the metal, silver prices, to go down to 10-year lows in a pretty tight market, it just goes to show you that the paper markets are just complete fallacy,” he said. “It’s got nothing to do with reality.”

He added that the recent decline in silver prices was purely financial and had nothing to do with changing supply and demand fundamentals.

“That was just purely financial; people having to sell paper, people having to short the metal because markets are dropping, it had nothing to do with the physical market at all,” he said. “It’s a very tight market, and now you can’t buy any metal at all.”

Spot silver last traded $0.65 an ounce higher on Monday to $13.24 an ounce.

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