IN SHORT:<\/p>\n
Silver deficit to be the second highest on record in 2024: Silver Institute<\/strong> \u00a0<\/p>\n The silver deficit will be the second highest on record in 2024 as industrial demand reaches a new high, according to the Silver Institute\u2019s latest World Silver Survey.<\/p>\n Silver has a few main roles to play: an affordable alternative to gold as a store of wealth (via physical bullion, silver ETFs); in jewellery; and an increasingly important industrial metal (solar panels, computers, mobile phones, cars and almost every appliance you can think of).<\/p>\n Silver\u2019s fundamentals, meaning supply and demand, have looked good for silver bulls since 2020 when the latest round of deficits emerged.<\/p>\n This has been driven by an uptick in industrial usage (~50% of demand) and an anaemic supply picture. In 2023, ~820Moz of annual production was dwarfed by consumption of ~1.14 billion ounces.<\/p>\n\n \u00a0<\/p>\n \u201cSilver\u2019s supply\/demand conditions are expected to enjoy another strong year in 2024,\u201d says Metals Focus, producer of the latest Silver Survey.<\/p>\n \u201cRobust gains from PV applications and a decent performance in other segments are expected to see industrial demand reach a new all-time record.<\/p>\n \u201cAn uptick in discretionary spending and restocking should also boost jewellery and silverware demand.\u201d<\/p>\n \u201cCrucially, supply will remain little changed, with a marginal decline forecast for 2024. This will lead to a 17% rise in the market deficit to the second highest on record.\u201d<\/p>\n\n It gets better. The main emerging consumers on the industrial side are photovoltaic solar cells and fast chargers for electric vehicles.<\/p>\n Source: CPM Group via Pan American Silver.<\/p>\n Silver for solar installations (PV) and automobiles accounted for ~267 Moz or 22% of total demand in 2023.<\/p>\n By 2030, the automotive sector will account for 200Moz of demand. By 2050, 50% of all silver demand is expected to be from solar cells.<\/p>\n \u00a0<\/p>\n Zealous #silversqueeze bros would have you believe a push though US$50\/oz and beyond is only a matter of time.<\/p>\n And yet silver prices haven\u2019t really read the memo, gaining a hard fought 9% over the past 12 months. Gold is up 18% in the same period.<\/p>\n USD silver price over the past 12 months. Source: ABC Bullion<\/p>\n For precious metals investors, gold has been the focus. And those physical silver deficits we mentioned? Negated by massive above ground inventories, says Metals Focus.<\/p>\n \u201cAt end-2023, stocks held in London and exchange registered vaults amounted to nearly 15 months of global supply and there are bullion inventories also held elsewhere,\u201d it says.<\/p>\n \u201cThis is likely to prevent a physical squeeze from emerging in the short-term, in spite of the robust supply\/demand conditions discussed above.\u201d<\/p>\n This means investment demand, not physical demand, will likely remain the dominant price driver.<\/p>\n Here, the outlook also looks pretty good for silver.<\/p>\n \u201cLooking ahead, recent speculative inflows into gold do create some downside risks for precious metals in general, which would extend to silver,\u201d Metals Focus says.<\/p>\n \u201cHowever, we expect any price weakness to be short-lived.<\/p>\n \u201cGiven that the Fed is still expected to start monetary loosening later this year (albeit at a slower pace than previous expected), we expect precious metals investor interest will be healthy in the second half of the year, which will ultimately be positive for the silver price.\u201d<\/p>\n \u00a0<\/p>\n Many global leaders are diversified, with silver produced alongside a range of other precious and base metals.<\/p>\n The world\u2019s biggest silver miner is 140-year old Mexican company Pe\u00f1oles, which produced 72.4Moz in 2023 but derives just 30% of its revenue from the precious metal.<\/p>\n Likewise, US$7bn capped Pan American Silver (NYSE, TSX:PAAS)<\/strong> produced 20.4Moz silver in 2023 at all in sustaining costs (AISC) of US$18.17\/oz, but also derived a big chunk of income from 883,000oz of gold production.<\/p>\n C$2.8bn capped First Majestic Silver (NYSE:AG, TSX:FR)<\/strong> also gets 50% of its revenue from gold.<\/p>\n Locally, the pickings are slim. \u00a0The Cannington zinc-lead-silver mine in Queensland is Australia\u2019s biggest silver producer (~12.5Mozpa), but owner South32 (ASX:S32)<\/a> says zinc-lead-silver lumped together were responsible for just 8% of earnings last year.<\/p>\n Not the best way for investors to jump on board the silver thematic.<\/p>\n One of the biggest exposures on the ASX is Adriatic Metals (ASX:ADT)<\/a> which produced first concentrate in February from its Vares silver (plus other stuff) operation in Bosnia.<\/p>\n ADT expects the mine to hit full production in the fourth quarter this year, just seven years after initial exploration began.<\/p>\n The US$189m development had a revenue mix consisting of ~50% base metals (like copper and zinc) and ~50% silver and gold when it was in studies a couple years back, when ADT used spot silver prices of US$24\/oz as its benchmark.<\/p>\n Silver and gold now make up over 60% of its potential revenue mix<\/a>, says CEO Paul Cronin. That could rise even further if silver and gold prices continue rising, as forecast.<\/p>\n\n \ufeff<\/span><\/span>\u00a0 The post Industrial demand, flatlining mine production pushes silver deficit to second highest on record<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nDriven by uptick in industrial usage (~50% of demand) and a flatlining supply picture<\/strong>
\nMain emerging consumers on the industrial side are photovoltaic solar cells and fast chargers for EVs<\/strong>
\nBy 2050, 50% of silver demand is expected to be from solar cells<\/strong><\/p>\nWhen silver boom?<\/h2>\n
Where are all the silver stocks?<\/h2>\n
\n<\/span><\/p>\n