Silver price to hit "high ranges" of triple digits; Not enough on planet to meet demand - Neumeyer
(Kitco News) - Keith Neumeyer, CEO of First Majestic Silver, has previously called for the silver price to eventually hit triple digits. Now, he's upgrading that forecast.
"We have two new driving forces which are electric cars and solar panels. These technologies, these businesses, really didn't exist for the most part a decade ago. Today, I'm even more committed. I'm thinking triple-digit silver…I was always thinking in the low end of that triple digit. But now, I'm thinking it's possible to get into the higher end of that range," Neumeyer told Michell Makori, editor-in-chief of Kitco News at the Denver Gold Forum.
Monetary stimulus, along with the debasement of the U.S. dollar, should help gold, which in turn would provide tailwinds for silver, but Neumeyer noted that silver has a sound future regardless of monetary policy due to its demand and supply fundamentals.
Importantly, there simply isn't enough silver production to meet long-term demand growth.
"As a mining industry, the miners produce about 800 million ounces of silver annually. You look at electric vehicles, the world will be consuming about 100 million ounces this year. You look at solar panels, another 100 million ounces. So, you have two industries that are consuming more than 10%, or close to 20%, of the world production. Above ground supplies are depleting at very fast rates. The deficit continues. Where is the silver coming from?" he said.
Neumeyer's comments come as governments around the world, including the U.K., the state of New York, and California, have set deadlines on terminating sales of combustion engine vehicles.
"The automotive industry, worldwide, produces 19 million automobiles a year, of which, 5 million of those are electric cars," he said. "So, if you're going to replace every fuel combustion car on the planet, by, let's call it 2030, 2035, call it 2040, how are you going to replace a billion cars at the rate of 5 million cars a year? Where's all that silver coming from? Do the math. For every 5 million cars, you need 100 million ounces of silver, so it's simple. There's not enough silver on the planet to meet the demands of government," he said.
For Neumeyer's thoughts on Bitcoin, as well as updates on First Majestic Silver's latest projects, watch the video above. Follow Michelle Makori on Twitter: @Michelle Makori