Commodity Trading:
Silver Futures
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Supply / Production
Considerations
The
Supply of Silver is based on two facts, mine production and recycled
Silver scraps. Fifteen
countries produce roughly 94 percent of the worlds Silver from mines.
The most notable producers are Mexico, Peru, the United States,
Canada and Australia. Mexico,
the largest producer of Silver from mines, is estimated to have produced
86.2 million ounces in 1998. Peru,
the world’s second largest producer of Silver, is estimated to have
produced almost 67 million ounces in 1998, while the United States is
estimated to have produced 53.3 million ounces.
Silver is often mined as a byproduct of other base metal
operations, which accounts for roughly four-fifths of the mined Silver
supply produced annually. Known
reserves, or actual mine capacity, is fairly evenly split along the lines
of production.
The
other major source from Silver is from refining, or scrap recycling.
Because Silver is used in the photography industry, as well as by
the chemical industry, the Silver used in solvents and the like can be
removed from the waste and recycled.
According to the 1998 World Silver Survey, approximately 152.2
million ounces of Silver were made available by recycling.
This represents roughly one- third of the Silver estimated to be
produced in 1998. The supply of Silver grew only marginally in the last year
according to industry estimates, but the total supply of Silver from scrap
has increased dramatically in the last decade as more advanced methods of
recycling have been developed.
The
United States recycles the most Silver in the world, accounting for
roughly 43.6 million ounces. Japan
is the second largest producer of Silver from scrap and recycling,
accounting for roughly 27.8 million troy ounces in 1997.
In the United States and Japan, three-quarters of all the recycled
Silver comes from the photographic scrap, mainly in the form of spent
fixer solutions and old X-ray films.
Total
world mine production is estimated to follow the same trends as those for
Gold and Platinum. Total mine
production is estimated to decrease by three to five percent in the next
three years as producers concentrate more on cost saving and efficiency
increasing techniques as opposed to new exploration and production.
The trend towards increasing productivity and profitability may
decrease the short-term supply of Silver in the near future, but overall
it should have positive effects on the industry as a whole.
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