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An important driver of this dynamic is more than 70% of silver being mined as a by product during the mining of lead, zinc, copper and gold, all of which we expect to see production increase by 1-3% y/y at least throu..

28 Sep 2013

LONDON (Commodity Online): Global silver mine supply is witnessing an up-trend and is likely to continue with its existing trend in the rest of the year and in 2014. Rise in mine supply may put pressure on the white metal prices to some extent. Silver recorded an up-tick this month after US Federal Reserve stated that its would continue with it's existing monetary stimulus till the economy reaches its strong growth path.

Analysts expect that US Fed may roll back its stimulus program partially this year and taper entire stimulus by the end of 2014. If the projections come true then, they may negatively affect the silver prices to some extent.

“Silver mine supply looks healthy and continues to grow unabated across regions. Having grown by an average of 3% y/y since 2004, we expect mine production to grow 1-2% y/y in 2013 and in 2014. An important driver of this dynamic is more than 70% of silver being mined as a by product during the mining of lead, zinc, copper and gold, all of which we expect to see production increase by 1-3% y/y at least through 2014,” said London based Barclays in a report.

However, as of now, silver is witnessing good retail and industrial demand. “In terms of industrial demand, semiconductor billings data for July revealed continued improvement in all regions, with the exception of Japan. Shipments rose by 22% across the Americas, 7% y/y across Asia-Pacific and by a modest 1% y/y in Europe. However, year-to-date shipments across Europe are flat y/y. The latest trade data for China showed that silver imports were down 16% y/y, with all forms of imports lower y/y including powder. Given the size of the industry surplus, and size of loss-making investment positions, we think prices are still likely to endure downward pressure,” Barclays noted.


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