SHOCKING CHART: The Silver Supply Crunch Continues

There is no other way to describe the radical change that has taken place in several areas of the silver supply market this year other than to say…. it’s quite shocking.  While certain analysts stated that the silver supply would indeed fall this year, I don’t believe anyone could have envisioned the kind of declines displayed in the chart below.

When I first discussed this subject matter in an interview last month, I thought there might be a chance that this silver data was incorrect… a typo of some sort.  However, the second quarter figures that were just released, do confirm just how dreadful silver supply has fallen from these two areas.

With the ongoing surge in physical silver investment demand and the rapidly falling Registered Silver Inventories at the COMEX, any decline in silver supply will only exacerbate the current tightness in the silver market.

Now, when we talk about “Declines”, the market normally states changes in the 2-5% range.  This may not seem like a lot, but when we are discussing large figures, 2-5% can add up to a lot of silver.  That being said, the figures shown in the graph below… ARE TOTALLY OFF THE CHARTS:

Australia-&-Canada-Silver-Production-2014-v-2015

According to the data put out by official sources, Canada’s silver production (Jan-Jun) this year is down nearly 20% and Australia’s is down a stunning 30%.  While it’s true that Canada isn’t a large silver producer, a 20% decline is still a big number in my book.  The reason for the decline in Canadian silver production is due to several large base metal zinc mines shutting down operations last year.

As for why Australia’s silver production fell a whopping 30% decline (9.5 million oz) in the first half of the year, part of the reason may be due to a major drop in supply from the world’s largest silver mine… the Cannington Mine.  Regardless, the combined silver supply from these two countries fell a stunning 11 million oz, 28% in just the first half of the year.

Even though silver production has declined from some of the other leading producers, it’s quite surprising to see the 4th ranked country in the world suffer a 30% reduction in supply in one year.

According to the data put out by several sources (Mexico INEGI, Peru Ministry of Energy & Mines, Australia Dept. of Energy & Resources and Chile’s Cochilco) here are the trends of the top five producers for half-year:

Top Five Silver Producers Change (Jan-Jun)

Mexico = -5%

Peru = +3.8%

China = EVEN

Australia = -30%

Chile = -6%

Unfortunately, falling world silver supply is taking place at the very same time as physical silver investment demand is skyrocketing.  As I stated in several interviews, I believe the current draw-down of Registered Silver Inventories at the COMEX is mainly due to this huge increase investment demand as industrial silver demand is likely shrinking.

It will be interesting to see how events play out in the financial and broader stock markets over the next few months.  If we do see major declines in these markets indices, this could cause even more investors to buy gold and silver.

If you think wait times of 2 months for certain silver investment products are long now… who knows how bad things could get in the future.

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43 Comments on "SHOCKING CHART: The Silver Supply Crunch Continues"

  1. Platinum may be nearly as good an investment as Silver, we just came out with a documentary:
    https://www.youtube.com/watch?v=XEGHngpLXmg

    Thanks for all your work SRS

  2. “We should be buying silver…..It’s an amazing story what’s happening……We are on Silver fumes! And people don’t realize it.”

    —Steve St Angelo (SRSrocco) End of April 2015

  3. This can’t keep going on for ever. The Pilgrims Society has had allot of leeway to be able to manipulate physical silver. That’s all but over. They can no longer accomplish their devious acts keeping the physical under water all the while gasping for air.

    If physical is showing signs of depletion and the Fed’s back is against the wall with no more tricks to pull out of their a**….the time is now t o stack !

    • And what if governments delegalize silver? It will be worthless as people will not be able to exchange it legally for other goods.

      • “And what if governments delegalize silver? It will be worthless as people will not be able to exchange it legally for other goods.”

        About the only way that the thugs who you are describing , can go about their dirty work of stealing property that is not theirs would be that they would go to bank vaults for any forced taking.

        If we do get to this stage of desperation there will be allot more important issues for the government to be tied up with just to keep their own hides from being chewed up. They will have allot of answering to do with not many a citizen believing in them.

        Getting back to the truth of physical silver & gold – it is real money and will be respected as such , more so during chaotic times. Even if it has to be transacted privately. Welcome black market /under ground / bartering / trusting and knowing who one’s dealing with.

      • Eva,

        If they “de-legalize” silver, gold, firearms, stored food over a certain amount, cash over a certain amount in your possession, or what they think is too much of anything are you going to roll over and give up those items? Maybe you would but you wouldn’t have much company, and the legal or illegal status of something may have no effect on value. Items that are illegal are sold and exchanged every day for cash and other goods. Like illegal drugs. Poor success in stopping illegal drugs [which really have a negative impact on society] is a model of how ineffective banning something is.

      • Crazy comment. Silver in ever iPhone and PV cell. No way the legalise silver. Apple would cry foul. It is too important as an industrial metal.

      • Making things illegal only spurs demand and inflates prices.

        Then there is jewelry,..are we making that illegal also? How about cell phones? Electronic equipment? Computers? How about cars?

        You clearly have no idea how many items have precious metal content.

      • If the majority of the people want to use it makes no difference what the gov wants .. it’s never been worthless and its used now more than ever in industry ..

  4. very good articale, you always tell it like it is keep up the good work and thank you

  5. Great research Steve you are a great asset to the community. Another set of data points to push silver where it belongs. What an amazing story that continues to unfold as we watch. (Some of us like around 2% paying attention). Brief question if your recent travels have show this: wondering why the large Canadien zinc mines closed recently…mines life or depletion or more toward reduced demand? I have seen other zinc mine closures discussed of recent. Many thanks, be well. Jweb

  6. Any idea how silver scrap supply is tracking at the moment?

    • BrotherJohnF made video about this shortly ago. He suggested that scrap supply had fallen off a cliff due to the fact that junk silver (90 % silver coins ) is now bought 2 bucks over spot. Everything is resold to the public nothing is scraped.
      https://youtu.be/hzT3TyyFghU

      • Cheers. Really interesting. Any idea on the scrap that comes from phones and computers? Where does that fit in the process?? Thanks

        • How much silver is in a smartphone ? i guess mabe 0.3 g or even less that’s worth 20 USD cent. what’s coming back from electronic recycling should be minimal.
          The main part of Silver is contained in the capacitor so called MMCC. The solder contain about 3% of it and is needed to replace the banned lead in the tin. Sometime ago i was researching that topic an i found a video from a hobby scrapper how to get silver out from electronics. When you see it you realize your can’t get rich from that(now).

          youtu.be/aBLZCHpTgtg

          (add the rest to the link i don’t want to make Steve angry with to many embedded videos.)

  7. Bullion banks are really stuck:
    if price increase and gain momentum, even more buyers will come afraid of missing the train.
    If they push the price lower, the spread between the physical and paper will increase to the point of snapping.

    Anybody who say they can manipulate PM forever will be very surprise soon, David Morgan always said a reset in 2016, coudn’t agree more. Sit tight, relax, eat you popcorn and watch the show 🙂

  8. Steve, I am going confirm with Dave Kranzler his opinion is that the cartel is holding back silver from the retail market all ready to hide a shortage in the 1000 oz bar wholesale market. And by doing so causing the shortage and high premiums in the retail market.
    TPTB seam to be in real trouble already. Things could get really interesting soon.

  9. And today the silver price takes a nose dive !!!! WTF is happening here…. This contradicts everything that is being said all over regarding the supply shortage.Seeing the price of silver go up the last few days was wonderful,but seeing it nose dive this morning is discouraging to be honest especially for
    this PM holder 🙁 Cheers !!!

    • “And today the silver price takes a nose dive !!!! WTF is happening here…This contradicts everything that is being said all over regarding the supply shortage.”

      It contradicts nothing that is being said about supply shortage. Physical supply & demand does not set the spot price of silver.

    • Sit tight and buy baby buy!

      You have to understand the Paper Ponzi World and it’s desire to continue to control the Empire. By buying PM’s you are inflicting damage and showing your contempt and hatred in a constructive way. You are also storing wealth which makes a scumbag banker’s balls sweat!

    • Ron, have you learned nothing from this blog amongst others. The paper price of silver has ZERO CORRELATION to the physical demand and shortage. It has no capacity to show ‘fair value’ and it will continue to be an irrelevant red herring until the warehouses are totally empty and no-one can buy physical at all.
      Then the holders of paper contracts will be found to own just that, paper, and the comex will be forced to settle the contracts.
      The news of this will wake up whats left of the investment community that the real price cannot be found or set at the comex. Period. So you neednt care one iota what the arbitrary price is that they set there.

  10. Anyone have a link to be able to see current Shanghai Silver Futures Market actual physical inventory? I can view the SSFM but I have not been able to find info on the silver inventories. I know it periodically gets posted at different blogs but I’d like to track it myself…..anyone anyone? Mr bueller…..thank you

  11. “According to the data put out by official sources, Canada’s silver production (Jan-Jun) this year is down nearly 20% and Australia’s is down a stunning 30%.”

    Seems strange that Australia has just introduced to the marketplace a .new 9999 bullion coin, the 2016 1 oz Australian Silver Kangaroo, on sale now.

    This being government the decision was probably made in 2014 or before however.

  12. Interesting. No mention of how many computers you need to get 1kg worth of MLCCs. I could see this being popular when the price goes up. Appreciate your comments.

  13. Miner very weak.Seems to go in direction deflation.Gold and silver down.
    We are still in bearmarket.

  14. Lets’ be serious about “forward mine hedging” and GFMS fictious fabricated supply and demand tables. KGHM has sold forward at least 2 years of silver (significant part of it in 2014), I say 2 years were publicly revealed because these were in big enough chunks to one buyer HSBC bank and as a public company KGHM had to disclosure these sales in oficial releases. Yet of these 40-50 milion ounces in 2014… and next such massive sale in 2015… GFMS reports only 15 mln. And lesser sales were unreported (if you call them to buy bigger sized silver order they will propose you earliest delivery date autumn 2017/ spring 2018; at least these were their delivery dates at early spring of 2015). And it’s just one single miner, mining less than 5% of worldwide mined silver. What about others? Don’t tell me that they were all unwinding theirs hedges while all facts and rumourd tells otherwise.

  15. tinfoil hat davy | September 25, 2015 at 8:28 am |

    Monarch Precious Metals has at least 50K oz. for sale, SD bullion has 10 oz bars in stock (a good deal if you buy FIFTY) and 100 0z bars two weeks out. I notice the widget is missing from the top of page showing the millions of oz. being mined this year. I’m tired of the hype and fear mongering. The world is in a deflationary spiral. Silver is going down, I would not be surprised to see $12. oz. by the end of the year.

    • tinfoil hat davy,

      We dropped the widget due to the fact that it had security problems with the site. Furthermore, the figures on the widget were incorrect. The top 4 Silver producers are down 6% YTD (JAN-JUN), while overall production is down 2.5%. I think the overall production (published by Chile’s Copper Commission) is a bit overstated. We will see when all data comes out.

      So you are tired of the hype and fear mongering…LOL. Then stop reading precious metal blogs. If you don’t realize the world is standing on a CLIFF with a dozen or so BLACK SWANS flying around, then I don’t know what to tell you. The situation is indeed grim.

      This is not hype… this is reality.

      steve

      • tinfoil hat davy | September 28, 2015 at 8:32 am |

        OK, I found the widget on oilprice.com. The fact that less silver is being produced might have something to do with the price being stuck at $15. or it might mean in the worldwide deflationary environment we are in demand is down. I started buying metals of all sorts over twenty five years ago and you might have more silver than I do but I’ll bet you a steak dinner I have more copper! I “woke up” to the fragility of our economy in ’09, started food storage and my brass and lead collection and pulled my small holdings out of the equity market, missing one of the best run ups in my life.
        From the collapse of the Weimar Republic to the fall of the Third Reich took over twenty years. Those black swans might take a while to land here as well.
        PS: at last count I had over 2500 # of copper. Do I owe you a dinner?

    • I think there are several things everyone needs to keep in mind when starting to prep and invest in precious metals, because if you don’t you’ll end up disappointed to say the least.

      1) Once you learn what you need to prepare and protect yourself, stop expecting imminent collapse, no matter how many indicators there are, nobody knows when the big one is going to happen, so save yourself time, energy and peace of mind by enjoying life NOW.

      2) Keep in mind the TIME factor when buying precious metals, it’s best to be in it for the long term, and you probably don’t want to be investing long term if you’re very old….unless you are wanting to pass down your metals to your family.

      3) Any precious metal dealer’s goal is to sell you as much metal as possible, so of course they’re going to implement all the marketing techniques available to them, one of them being a primary human motivator which is FEAR, and you will end up buying more than you probably should because of it. In fact, metal dealers have a perfect marketing formula: a) Protect your life savings/wealth from imminent collapse (fear, safety) b) Revolt against the financial criminals/central bankers (do good for humanity, contribution) c) Spread the word and inform your family and friends about reality vs matrix (being informed, smart).

      So now you have this formula to summarize from above:

      You fear the imminent collapse and have a chance to preserve your wealth by revolting against criminal central bankers and buying as much precious metals as you can get your hands on, which makes a great contribution to humanity, and you are being very smart and educated because you know how corrupt the system is and what real money is about.

      All of the above might be true, but it’s important to keep in mind so you don’t end up making foolish mistakes by making emotional decisions with your finances.

      • I forgot to mention SCARCITY which is what’s happening right now all over the place, “there is not enough gold and silver” and shortages everywhere so you better get it while you still can! –this is another very powerful marketing tool.

      • “All of the above might be true, but it’s important to keep in mind so you don’t end up making foolish mistakes by making emotional decisions with your finances.

        Devoid of accompanying emotions you can come to about the same decisions about you finances, as logic and information point the way. But emotion may be a motivating tool to get you there faster. An example would be if one feels enough emotional sense of urgency to save in silver at these prices. Scarcity may or may not manifest relatively soon. But it might, and at some point the commodities futures exchange can’t control the price. And what else are you going to put small amounts of currency into now? Stocks? Bonds? Cash in the bank?

        But you are right; chill out sometimes and enjoy family and friends…and any blessings of health and freedom you have.

  16. Since years we know that this is all nonsense.The greatest nonsense is the safe haven.Exactly the opposite is the case.In good times PM are performing but not in bad one.

    • silverfreaky,

      LOL… why don’t you let everyone know here why you continue to bash the precious metals? Why don’t you tell us that 2,000+ years of gold and silver history don’t matter any longer. Why don’t you tell everyone that NOT ALL FIAT CURRENCIES DIE… the Dollar will live on forever..LOL.

      Sometimes I wonder your motivation to continue your BELLY-ACHING about the precious metals when you can be spending your time more wisely watching CNBC or Bloomberg?

      steve

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