2016 Silver Demand exceeds supply again

 
Today is Friday 18th November 2016 and we are briefly covering the issue that silver demand in 2016 is likely to exceed supply.

• The silver market is expected to be in an annual physical deficit of 52.2 Moz in 2016, marking the fourth consecutive year in which the market has realized an annual physical shortfall.

• Silver prices this year through 11th November averaged $17.23/oz, which was 9.9% higher than in the same period in 2015 and forecasts silver prices are likely to average $17.15/oz for the full calendar year, a 9.4% increase over the 2015 average. This means they expect silver prices to fall a little further between now and the end of the year.

• Total silver supply is forecast to fall 3% to 1,012.4 Moz in 2016. The decline is expected to be driven by a 1% drop in mine production, a 0.3% fall in scrap supply and net de-hedging of 20.0 Moz. Mine production is forecast to reach 887.4 Moz this year, which is almost 6 Moz lower than 2015 but is still the second highest year of production on record.

• Silver bullion coin and bar sales are expected to contract 24% to 222.0 Moz this year, its lowest level since 2012. Bullion silver coins are forecast to reach 122.7 Moz, which is 7.9% below last year’s record of 133.2 Moz

• Physical bar demand is expected to contract by 38% this year to 99.3 Moz. driven by a lacklustre Chinese economy and weak consumer sentiment in North America. Demand in Europe, on the other hand, should improve by 14% reaching 14.5 Moz this year on the back of Brexit fears and a rising silver price.

• Physical bar and coin demand should account for 21% of physical demand in 2016, down from 25% in 2015

• Total industrial demand for silver is forecast to decline by 1% to 585.1 Moz, accounting for 55% of physical demand.

• Jewellery fabrication is forecast to drop 8% to 208.5 Moz. A decline in discretionary spending, thrifting, lower economic growth and a higher silver price have all contributed to the overall decline.

Whilst these figures suggest to us that the silver market over the long term of some 10 – 30 years is likely to produce significant gains for those who are clever or wise enough to save and store it away now, it will take either; a black swan event or paper investor speculation or a currency crash to occur in order to provide those fantastic gains the pumpers dream of before that long term haven is reached.

In other words, if you buy silver do so for the long term in mind or to act as a currency or portfolio hedge, do not do so in the belief that you are going to become rich over night; and should such an event occur in the interim we simply quote that well renown 1970’s TV series starring the Fonz – Happy Days.





MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet