The U.S. Continues To Import Record Volumes Of Silver

According the most recent official data, the U.S. continues to import record volumes of silver.  This is quite interesting because retail physical silver investment and industrial demand dropped off toward the end of the year.

After the huge spike in physical silver investment from July to September, demand cooled down in October and November.  Thus, silver imports into the United States also declined during those months.  However, something changed in December.

The USGS reported a huge 33% increase of U.S. silver imports in December versus November:

Total-U.S.-Silver-Imports-Nov-Dec-2015

The U.S. imported 557 metric tons (mt) of silver in December compared to 418 mt in November.  Now, if we look at the entire year, the U.S. imported nearly 1,000 mt more silver than it did in 2014:

Total-U.S.-Silver-Imports-Q1-Q4-2014-2015

Again, why would silver imports surge in December, if physical investment and industrial demand was lower.  I believe there are large entities acquiring silver off the radar.  Hell, the Comex silver inventories declined in December.  So, there was no need for additional silver imports to supply the Comex Exchange.

Where did the U.S. import most of its silver?  Of the 5,935 mt of silver imported into the United States in 2015, 80% or 4,772 mt came from Mexico and Canada:

Top-Sources-Of-U.S.-Silver-Imports-2015

According to the USGS statistics, the United States had to import 72% of its apparent consumption in 2015.  Last year, estimated total U.S. silver consumption was 8,100 mt.  Domestic U.S. silver mine supply was 1,100 mt and scrap supply was 1,200 mt for a total of 2,300 mt.  Thus, the U.S. had to import a net 5,800 mt to meet its total silver demand in 2015.

This was the highest percentage in five years.  The second highest percentage was in 2011, when the United States had to import 66% of its silver consumption.  This dropped to a low of 60% in 2012 as total apparent U.S. silver consumption fell to only 6,890 mt compared to 8,310 mt in 2011.

What is interesting here, is that U.S. had to import a higher percentage of silver in 2015 than it did in 2011 ( 72% versus 66%).  In 2011, the price of silver hit a high of $49 with much higher industrial demand.  Compare that to a silver price in 2015 that is 71% lower, while industrial demand was likely 12-15% lower than 2011.

So, the 1,000 metric ton increase of U.S. silver imports in 2015 went to fuel the insatiable physical retail investment demand.  However, we see a strange anomaly in December as U.S. silver imports surged while retail investment and industrial demand declined.

This leads me to believe someone with BIG POCKETS are acquiring silver while the market is lulled to sleep.  With the huge spike in physical gold and silver buying yesterday as the prices surged 5%, it looks like 2016 could turn out to be quite an interesting year.  I wouldn’t be surprised to finally see the avalanche of buying that will totally overrun the precious metal markets.

If the United States had to import 72% of its silver last year to meet consumption, what happens when the world starts buying silver to protect their wealth?  There just won’t be enough silver to go around.  The day when the market price of silver goes over $100 with no sellers is coming.

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31 Comments on "The U.S. Continues To Import Record Volumes Of Silver"

  1. Weird stuff. Is the ‘smart money’ betting on the stock to flow ratio ? East vs west, gold vs silver? Or do ‘they’ see a Comex/LBMA/SLV/GLD shutdown? Something wicked this way comes….

    • houtskool,

      Who knows. But, there is no reason for U.S. silver imports to surge 33% in December. I would imagine industrial demand really tanked the last quarter of 2015, along with lower retail physical investment buying.

      Again, I believe BIG POCKETS are acquiring silver on the HUSH-HUSH. I gather they know that FAN IS GOING TO HIT THE CRAPPER this year and are taking advantage of bargain basement prices.

      steve

      • No other explanation from me. This hoarding doesn’t seem to have a industrial demand blind spot. Maybe the US mint is frontrunning much higher demand in ase’s. Agreed though, big pockets, with knowledge.

        • The US Mint could be front-running the market …. they are in a perfect position to gauge supply/demand ….. and are currently only producing supply that meets partial demand.

      • There is a possibility that deep-pocketed businesses that need silver are starting to stockpile it too.

        Name the five domestic corporations that use the most in their industrial production. Maybe two or three are using low interest loans for stock buy-backs, creating artificial demand, raising the stock price, and therefore the board gets “performance” bonuses,

        Maybe two or three, instead of purchasing so much of their own stock, are stockpiling silver in anticipation of the price going up. However that would be the intelligent thing to do; and intelligent direction seems to be lost as an organization or government grows.

        • David,

          It would be nice to know who is buying what. But, I can tell you… at some point, it won’t matter. There is so little silver out there that if we just had a doubling from 0.5% to 1% of buying, it would totally overwhelm the market.

          When the institutions finally get their heads out of their arses, and start buying gold and silver to protect wealth… we will enter a entirely different market and world.

          steve

          • YOU AIN’T A KIDDIN’ THERE FRIEND!!! When ALL the BS is exposed…the ONLY thing left will be the ORIGINAL Monies (Silver & Gold)..and I mean, IN THAT ORDER…For the “Allowed” time THEY will continue to exist.

          • To give you a hint at who is buying…my wife and I have a multi-million dollar portfolio that we’ve slowly been liquidating over the past 3 years and purchasing gold and silver (mostly American Eagles). These days we’re buying a monster box or two every few weeks. There are a handful of friends with similar means that are doing the same thing. My colleagues in China are taking deposits on monster boxes with sealed straps at a premium to what we pay here with no questions asked. I’m not a doomsday prepper or anything, but my calculations suggest that the collapse of a bond market, housing market (again) and stock market (again) are eminent. If it’s any indication to our readers, my stock broker asked who my gold and silver dealer was and if I could introduce him.

          • Rich,

            Thanks for sharing your info. I would imagine there are a nice chunk of folks doing the same thing. I don’t know how long the Fed & Central Banks can continue propping up the system, but each month that passes is another month closer.

            steve

      • Smart guy Steve…That’s EXACTLY what I thought about all this PM’s buying…The BIG POCKET folks are buying up the stuff using “Intermediaries” so that the “Naive” won’t catch on until its too late…Meanwhile THEY will do and say ANYTHING to give the Naive the impression that PM’s are “Pet Rocks”???
        Just how stupid do they think we are…NOT ME…I learned Long ago about What REALLY goes on in the “Financial world” and have been “Stacking” for years now.
        Namaste!

        • Right on !! End game, thus NO RISK. Monopoly OVER & thus ALL LIQUID FUNDS IN GOLD/SILVER & NOW JUST WAITING. INEVITABLE BY DEFINITION & LEMMINGS REFUSE TO ACKNOWLEDGE. CREDIT CRUSHES CONSUMERS — PSYCHO WEAKNESS. SPEED + GREED MEET NEEDS OF KEEEEEDS WHO MATURE & DESTROY EMPIRES (ALL). CAIN’T WE EVA LEARN?? STATS? IF NOT IN 10,000 YEARS, NOT EVER BY ALL ODDS. NEED LEARN JUST ENJOY WARS, KILLING, HEAD SMASHING, & ALL NEW GAMES ARRIVING IN WEST FROM EAST — LIKE SUN BUT OPPOSITE FROM JET STREAM. BRUTAL FEW YEARS AHEAD IN EU & USA — MAN BATTLE STATIONS.

  2. Hi Steve,

    I enjoy your articles – thanks for putting all the time you do into the research for us.

    I saw this today on Kitco, and it doesn’t seem to match with what you’ve been saying (talking about the second sentence below, not the electronics). Care to comment on/dispute their stats when you get chance?

    The latest GFMS data shows that silver demand for electronics has been declined over 6% from 2013 to 2015 and is expected to be 242.5 million ounces in 2016. Over the same period, total physical demand for silver has also declined by about 4%, and is expected to reach about 1.05 billion ounces so far in 2016.

    By Sarah Benali of Kitco News; sbenali@kitco.com

    • Ron,

      When they say, “Total physical demand declined about 4%” that is including a 30 million oz (Moz) drop in industrial fabrication and 20 Moz decline of investment demand. However, I actually believe physical investment demand was higher in 2015 than 2013. We must remember, GFMS does not use private rounds and bars in their figures.

      I had an email exchange with GFMS last month and they let me know they estimate that private bars and rounds was likely 30-40 Moz in 2015. Because of the shortages in 2015, there was a lot more private round and bar purchases than in 2013. So, I believe total physical demand in 2015 was only 20-30 Moz less than 2013… and all of that was due to a drop of industrial demand, not physical investment demand.

      steve

  3. I am worry if the price recover the miner will increase their output like crazy! Your past article show that Mexico increase silver continuously until 2014!

  4. Hello Folks… I use approximate prices only in this posting. If the spot price of silver stays below $18.00, more primary silver miners will slow down production, and put some mines on “care and maintenance.” Silver production will decrease, just as Steve suggests. If copper and zinc prices remain low, base metals producers who mine silver as a bi-product will lower overall production of their mines, and less silver will be produced. . If the price of silver soon reaches the $18.00 to $21.00 level AND the U.S. dollar remains in the 90 to 95 level, some miners will hang tough and production may remain at today’s levels. If the price of silver quickly goes above $21.00, and depending on how fast that happens, silver production from the primaries will increase. We have to remember that silver is priced in U.S. dollars, and most mining expenses throughout the world are incurred in local currencies. Therefore, it’s a lot easier than you may think for Canadians and Mexicans and Brazilians, etc. to mine at a profit. Using Canada as an example. .. Most of the mining expenses are in Canadian dollars whereas they sell silver in U.S dollars. Huge bonus profit there.

    My take on what will happen is that the silver price will rise, and silver production will rise, but unless the price goes up fast, there will be a lag-time, with shortages and premiums on all deliverable silver products. And if base metals prices stay down, well, silver production from that category will stay down. Silver production is a small part of their profit structure, so silver does not determine the level of their mining activity. I believe that is what we’ll have.. e.g. very little (and perhaps diminishing) silver production from that area.

    Further prediction… The big quiet buyers (which I do agree exist) will not be interested in selling quickly in order to reap a 20% or 40% premium that could occur in the short term. Those folks are long-term holders, and they play the game expecting multiples like doubling and tripling and ten-times-ing. Those folks do their homework and then make their commitments with big money, and expect big returns. And they will not mess around in the market by snagging a fast, small profit. That would be a waste of their time. And when they do sell, they’ll likely do it in a way so as to not upset the market.

    Charley Z

  5. Just a quick note on a US based Silver company …. many of you are probably already well aware of NYSE: CDE … however, what you may not be aware of is; it’s been working hard on it’s balance sheet & income statements over the past couple years …. and it’s been able to reduce it’s AISC to the mid 13’s in the most recent quarter ….. compared to where the stock was a couple years ago; the stock is still in the toilet …. you can read the conference call transcript from yesterday here;

    https://finance.yahoo.com/news/edited-transcript-cde-earnings-conference-213936721.html

  6. Why do you and everybody else keep talking about silver going to $100.00? Don’t you know it will reach at least $100,000?

  7. Since the US dollar is so low wouldnt now be the time for the US government to buy silver at low prices paid for by free money then let prices rise and pay their debts?.
    How would anyone think that the US could run out of gold and silver?.
    You cant go broke when you can print money, ever.

    • Sure can – BROKE as hell. Limberly Clark can then print ALL they want but nobody will accept as valid currency – even if you deliver in wheel barrow or 40′ containers. NO RAIN? GAME CALLED FOR BANKRUPTCY !! SORRY !! SELF INFLICTED WHILE OUR STUPIDITY INHERITED – DNA — GREED LEARNED.

      • I am not so sure as goverments have a lot more available to them in modern times than past fallen empires had, they only had physical money.
        When you are the main currency everyone else is measured against you can easily move the goalposts in many ways.
        I find huge holes in arguments put forth by self proclaimed experts such as Peter Schiff and Mike Moloney.
        Noone really seems to question them, schiff was loudly stating that the US government was robbing its citizens via devaluing thier dollar what does he say now? and devaluing your own dollar is doing much for your country in the way of boosting local manufacturing and services anyhow so none of these guys make any sense.
        Moloney is from the Kiyosaki school of bait and switch, how is buying measly amounts of silver going to help any average person even 100 % gain is a pittance its been five or more years now of establishment bashing.
        Who are the real spindoctors?.

    • Well, Mark, what has happened in Zimbabwe or Weimar Germany for that matter ? Care to explain ???

      • I have read all the articles and varied opinions for over five years and I was also a bit swayed by the fearmongers but the time has come to call it what it is, sure silver and gold will rise but parabolic, dont think so.
        Where the US is concerned I think it is a different ball game compared to other hyperinflation scenarios, totally different.

  8. Meant to say prices are low due to US dollar being so high.
    Is it a coincidence that prices are starting to rise early in the new year?.
    I dont see how can anyone think that the price of silver will go over $100 in the next ten years.
    We will certainly go cashless in the near future.
    Gold and silver are useless to your average person imo as by the time silver rises significantly anyone but the top 1 percent will be forced to sell what they have.

    • @Mark
      In the next ten years mankind will no longer need Money at all, in ANY form…Highly Advanced Technologies will make it Obsolete…Understand? Seems there are LOT of folks that have yet to learn the TRUTH about the “Origins” of money and WHY it was created…WHY its called: “The Babylon Slave System”…For decades now governments around the world have been “Secretly” using this tech to help keep mankind from ever finding out about it…EVERYONE will be made aware of what is called the SSP (Secret Space Program)….a VERY “Classified” program.
      From there we will find out about ALL Mankind’s REAL “History” and how POWERFUL WE ALL ARE, and once we learn THAT and all about “Quantum Science/Physics and HOW it works…WE will UNDERSTAND why MONEY will become USELESS.

  9. The gold/oil ratio ($GOLD:$WTIC)

    Closed Friday at over 45

    What does this mean? Either one or the other is overvalued/undervalued.
    Considering the close co-relation of the USD (petro dollar) and a bbl. of oil.

    Something is breaking down, or out! Where gold goes silver follows.

  10. Steve,

    Have you noticed that the bid-ask spread in Silver has went from one penny to six pennies in the last week or so. I tried to look around in the PM community to see if anyone noticed this and I haven’t seen anything. From statistical experience, this is usually a precedent for a tight market and major move.

    On a side note, could the extra imports in US silver is going to the US military industrial complex. if you look at the arms sales last 5 years, they been growing 30% annually. what you think?

    Joe

    • Hey Joe, I’ve got to agree, those bomb builders aren’t stupid. They buy silver when it is at rock bottom prices because they know they will sell their products to a captured customer, being Uncle Sam. They also know that their products will be in demand as we head toward another major war. But what we stackers know is that silver used in their weapons will be gone forever and that the fraudulent 80/1 gold/silver ratio will corrected back to 10/1 where it belongs.

  11. Agreed. We see it this way. If the government and possibly big banks are going to artificially suppress the price of silver and gold, then logically, aren’t they also simply creating better buying opportunities for those of us who ar accumulating? Additionally, for folks who don’t have the means, it extends the time in which they can stack.

    Win-win for those of us on the “stackers” side when folks figure out that these precious metals are actually precious!

    Praying for all my friends on the boards to spread the word to those we care about.

  12. I’d appreciate an update on the profitability of PM miners. Thank you.

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