Precious Metals

Silver Mine supply at deficit fifth straight year

Silver sales and supplies have taken a large hit, according to World Silver Survey 2018, released by The Silver Institute.

Coin image courtesy of SilverTowne; background image courtesy of The Silver Institute.

2017 was the fifth consecutive year of annual deficits in the global mine supply of silver, with the deficit reflecting a  drop of 26 million troy ounces by year's end, according to World Silver Survey 2018, published by The Silver Institute.

The survey was prepared for The Silver Institute by by the GFMS team at Thomson Reuters.

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Mine supply fell for the second consecutive year by 4 percent in 2017, following 13 consecutive annual increases prior to 2016, according to the survey. Factoring in a reduction in supply from scrap, overall silver supply dropped 2 percent in 2017 to just under 1 billion ounces. This was a result of years of capital expenditure reductions, in combination with supply disruptions, particularly in the Americas. 

The London Bullion Market Association silver spot price averaged $17.05 per ounce in 2017, down 0.5 percent year-on-year, according to the survey. Prices traded in a range of $15.22 per troy ounce to $18.56 an ounce, starting the year at $15.95 per ounce and ending it at $16.87 per ounce.

Investments, comprising bar, coin and medal purchases, and additions or drawdowns to exchange-traded products, plummeted by 40 percent in 2017, to 153.5 million ounces, the lowest level since 2007. “In value terms, annual identifiable investment was approximately $2.6 billion in 2017, a 61% drop off from the historical high in 2012,”according to the survey.

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“Silver coin and medals fabrication tumbled by a sharp 35 percent in 2017, to hit 79.4 million ounces, the lowest level since 2008, led by subdued demand from the western hemisphere on the back of growing risk appetite and rallying equity markets, which saw investors holding back from buying zero-yielding assets,” according to the survey.

The Silver Institute is a nonprofit international association that serves as the industry’s voice in increasing public understanding of the many uses and values of silver.

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