As the silver price rally continues, mine supply from three of the top
producing countries fell significantly this year. Peru, Chile, and
Mexico all reported declines in silver mine supply in the first half of the
year, with Peru suffering the largest dropoff. With these three
countries accounting for 45% of total global silver production, a reduction
in mine supply can impact the overall market.
According to the mine supply data reported by each country, Peru’s
silver production is down 10% in the first half of the year, while Chile fell
7% and Mexico was lower by 4% (Jan-May). The total decline in
silver production from these three countries in just the first half of the
year is 12 million oz (Moz):
As we can see from the chart, Peru’s silver mine supply for the first half
of 2019 fell 216 metric tons, Mexico declined 113 metric tons and Chile lost
44 metric tons versus the same period last year. As I stated, Peru and
Chile’s silver production data was for the first six months while Mexico’s
figures were for Jan-May. Mexico will likely update their data for June
within the next week.
I also wanted to provide the actual data reports released by these three
countries so that you can see for yourself the silver production declines in
each:
Here we can see that silver production reported by Peru’s Ministry of
Energy and Mines shows a 10.46% decline in silver (plata) mine supply from
Jan-Jun. Next, Chile shows a 7.2% decline in its domestic silver mine
supply in the first half of the year while gold production increased 13%:
And lastly, according to Mexico’s INEGI, the country’s silver production
fell 113 metric tons, or 4.4% in the first five months of 2019:
Here are the rankings of the top 10 silver producing countries in the
world in 2019, according to the World Silver Survey (figures are rounded):
- Mexico = 197 Moz
- Peru = 145 Moz
- China = 115 Moz
- Russia = 43 Moz
- Chile = 42 Moz
- Bolivia = 40 Moz
- Poland = 40 Moz
- Australia = 35 Moz
- USA = 28 Moz
- Argentina = 26 Moz
I could not get the total mine supply data for Russia, but its
largest primary silver mining company, Polymetal, reported a 15% decline in
silver production for 1H 2019 vs. the same period last year. So,
it seems that many countries are showing declines in silver mine supply this
year, right when the silver price has broken above a 6-year resistance level.
Polymetal’s silver production in 2018 accounted for nearly 60% of Russia’s
total silver production that year. So, it will be interesting to see
how the rest of the year plays out with these top silver producing countries.
Lastly, I will be putting out a new video this weekend on the
SILVER MARKET PRICE action. It looks like silver has broken
above that important $17.25 level with the markets selling off big time along
with the race for Government Bonds to go further into negative interest
rates.
If you have not seen my recent Silver Price Video, please check it out
below:
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