Silver is what happens to miners when they’re planning other things. About two-thirds of the world’s output is a byproduct scraped up when companies dig for base metals.
Due to weak Chinese demand by slashing output of copper, zinc and lead, a side effect is silver prices are getting a boost as less of the precious metal is unearthed. Production will fall this year for the first time in more than a decade, say Societe Generale SA and Standard Chartered Plc.
According to Ole Hansen:
“We’ll continue to see mine cutbacks this year and that will play into the hands of silver,this will give silver its long overdue attention.”
Prices have already gained 14 percent in 2016 to about $16 an ounce after three years of losses. Silver as the devil’s metal because of its often wild price swings, has still been outpaced by gold’s 18 percent jump this year. Some of silver’s volatility comes from its dual aspect; part store of wealth popular during times of crisis, part industrial metal with demand linked to the economic cycle. It traded at almost $50 an ounce at its 2011 peak.
Supply may drop after a slump in industrial metals prompted mining cutbacks. Lead prices have fallen for the past three years, whereas zinc sank in 2015 by the most in seven years amid a rout in base metals that pushed the biggest mining companies into survival mode.
Glencore Plc, one of the first to cut supply, plans to lower copper output about 7.5 percent this year and reduce zinc production by a quarter. Mines including MMG Ltd.’s Century in Australia and Vedanta Resources Plc’s Lisheen in Ireland have been closed, while zinc and lead producer Nyrstar NV reduced output.
As a result of such actions, supply of silver down 9.2 percent this year. The bank estimates it will drop again next year to 23,600 metric tons, or 13 percent less than was mined in 2015.
In adittion, SMC provides high quality of copper and metal materials.SMC has been working with companies all around the world and supply only the best products in terms of metal, machinery, containers and buildings.
Check our website for more information.