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Global Silver mine supply records second consecutive loss in 2017

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NEW YORK (Scrap Register): Global silver mine production fell by 4.1 percent in 2017, experiencing its second consecutive annual decline to record 852.1 Moz, according to the Silver Institute.

The decline was mainly credited to a series of supply disruptions across the Americas. Another leading factor in the drop was due to the primary silver and gold sectors, where production fell by a combined 29.4 Moz. 

Of the key producing countries, Peru and China registered subtle dips, followed by more acute losses in Australia and Argentina.  Offsetting those losses was higher output from Mexico, which was once again the world’s top silver producing country, trailed by Peru, China, Russia and Chile.

Supply from primary silver mines decreased by 9 percent in 2017 to contribute 28 percent of total mine supply. The lead/zinc sector contributed 36 percent of by-product output, followed by copper at 23 percent and gold at 12 percent.

Silver scrap supply fell to 138.1 Moz, marking its sixth successive yearly decline.  Lower scrap flows from Asia, mainly China, driven by a lack of incentives from both suppliers and consumers to recycle their valuables, is chiefly responsible for the fall.

Supply from the western world was marginally higher, driven by increased volumes from the United States and Europe.

Above-ground stocks rose 3 percent last year.  Of the four exchanges that report silver stocks, three saw total silver inventory growth of 2 percent in 2017; COMEX in the United States, the SHFE and the SGE in China.  In contrast, silver inventories held at TOCOM declined dramatically by 98 percent, driven by strong industrial demand in Japan.

GFMS reports that government sales of silver were once again absent from the silver market in 2017.  Lastly, in the supply category, the delta-adjusted hedge book inched higher by 1.4 Moz, ending last year at 21.5 Moz.

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