CPM Forecasts Big Silver Surplus This Year
Source: Mineweb, Dorothy Kosich (4/29/09)
"...CPM estimated that total silver supply increased 2.3% to 803.2 million ounces last year..."
In the Silver Yearbook 2009, CPM estimated that total silver supply increased 2.3% to 803.2 million ounces last year, and forecast that total silver supply will increase 2.5% to 823.1 million ounces this year, primarily due to increased mine production and secondary recovery from silver scrap.
Noting that mine production accounts for 70% of total silver supply, CPM projects that mine production may increase 3.2% this year to 566.3 million ounces. CPM advises that the total gross annual mining capacity of expansions and new mines due over the next couple of years will add at least 118.5 million ounces of annual silver production. "More projects should be expected to be advanced in the future, adding to this total."
Silver from scrap rose 4.7% in 2008 to 254.5 million ounces, CPM said, anticipating a 0.9% increase to 256.8 million ounces from scrap in 2009.
CPM's analysis also found that the key driver for silver prices "is investor attitudes toward silver and how those attitudes are being reflected in investor buying and selling of this metal. Over the past couple of years, investors have significantly increased their silver holdings and this has been reflected in relatively high silver prices. It is expected that investors will continue to be interested in buying silver through 2009."
In their report, CPM notes that "shifts in the nature of investment management, changes in the nature of investment management, changes in the methods for investing in precious metals, and other trends all suggest that investors may continue to buy large volumes of precious metals for several years to come, seeking to maintain their safe haven investments even when economic recovery emerges."