The Silver Price Surges Higher as Mine Supply Falls in Top-Producing Countries
The comments below are an edited and abridged synopsis of an article by SRSRocco
Chile and Mexico all reported declines in silver mine supply in the first half of the year, with Peru suffering the largest drop off. With these three countries accounting for 45% of total global silver production, a reduction in mine supply can affect the overall market.
According to the mine supply data reported by each country, Peru’s silver production fell 10% in the first half of the year, while Chile’s fell 7% and Mexico’s fell by 4% (January-May). The total decline in silver production from these three countries in the first half of the year is 12 million ounces.
The chart (included) shows that Peru’s silver mine supply for the first half of 2019 fell 216 tonnes, Mexico’s fell 113 tonnes and Chile’s fell 44 tonnes versus the same period last year. Peru and Chile’s silver production data was for the first six months, while Mexico’s figures were for January to May.
Here are the rankings of the top 10 silver-producing countries in the world in 2019: Mexico—197 million ounces; Peru—145 million ounces; China—115 million ounces; Russia—43 million ounces; Chile—42 million ounces; Bolivia—40 million ounces; Poland—40 million ounces; Australia—35 million ounces; the US—28 million ounces; Argentina—26 million ounces.
Total mine supply data for Russia was not available, but its largest primary silver mining company, Polymetal, reported a 15% decline in silver production for the first half of 2019 vs. the same period last year. So, it seems that many countries are showing declines in silver mine supply, while the price has broken above a 6-year resistance level.
Polymetal’s silver production in 2018 accounted for nearly 60% of Russia’s total silver production that year. It will be interesting to see how the rest of the year plays out with these top silver-producing countries.