SILVER (Ag) PRODUCERS

[NYBob]

U.S. Silver; New demand sources to bolster silver prices

Investment demand remains a big driver but, growing, new
industrial uses are expected to eat away at the supply
surplus
Author: Geoff Candy

GRONINGEN -

Demand for silver from new sources like the solar energy, medical and water purification sectors is likely to quadruple in the next 10 years.

This is one of the forecasts made in the VM Group/Fortis Bank Nederland, Silver Book. According to the research, demand for such products is likely to rise to at least 230 Moz to account for roughly 25% of world silver demand.

And, coming on the back of significant, continued inflows into silver ETFs, means that the fundamentals over the medium to long term for the metal are "more convincingly bullish that they have been for some time".

Part of the reason for this is that such an uptick in industrial demand, which has waned significantly as the photographic industry has used less and less of the metal, would result in a decrease in the current metal surplus.

As, the Silver Book explains, "For years the silver market has been characterised by falling demand in the photographic industry and tepid jewellery offtake, while supply has seen rapid growth. The resulting market surplus has thus risen from 1,800t in 2000 to an estimated 7,200t in 2010."

One just needs to look at the price of aluminium to see what normally happens to a sector with such a large supply overhang but, as it turns out, silver prices have done rather well, primarily because of the massive demand for silver ETFs.

As the Silver Book says, "Investment demand has soared since the launch of the first silver-backed ETF in 2006, and now accounts for more than 400 Moz (12,440t) of silver held in bullion bank vaults. Physical investment in the form of coins and bars has also helped support prices in the face of this explosive growth in supply".

The caveat, of course, as the research points out, is that price support has increasingly come to depend on investment demand, especially because, by and large, the supply side of the silver market is independent from the fundamentals affecting the price.

This is because a significant portion of silver is mined as a by-product or a co-product metal.

Indeed, according to the VM Group research done on behalf of Fortis Bank Nederland, "About 30% of total annual silver output is from primary production, with 15%-20% as a co-product and the balance a byproduct. Primary supply is set to fall to a low of 23% by 2020, as co- and byproduct silver mine supply becomes more dominant."

According to the Silver Book, supply is expected to increase at a CAGR of around 2.4% over the next ten years, from more than 22,000t in 2009 to more than 28,500t in 2020, so keeping supply running well ahead of potential demand could be a very tall order."

"Our supply-side estimate includes advanced projects as well as existing mines and mine expansions. It also includes identified uncommitted projects that might come online in the next 10 years, and it is these latter projects that will determine the market balance by 2020. Should none of the uncommitted ounces be brought online, but ETF demand dip slightly, to say 1,500-2,500t/year, then we estimate a market surplus of just 800t in

"If ETF demand grows to more than 2009 levels (more than 4,000t) in the period 2014-2020, then we estimate a market deficit of as much as 2,400t in 2020. But if mine supply, including uncommitted output, all comes online without delay, and ETF demand declines to as low as 1,500t/year, then our market balance will show a surplus of about 4,900t. The market balance scenario considers that all the uncommitted ounces of mine supply come online while investment demand rises.

It does warn, however, that while a compound annual growth (CAGR) rate of more than 12% in the next 10 years for demand from these new sources is likely, a significant rise in prices would inevitably threaten some of the new areas of demand.

"The higher the silver price rise, the more some of these new silver consuming technologies would seek to substitute the metal with cheaper products," the report says.

But adds, "Tighter silver market fundamentals are very likely to fuel investment demand growth...as the current surplus begins to erode over the next few years we expect a reaction among the investment community, with ETF demand likely to hit new records, possibly bringing about a deficit. However under these circumstances, and rising prices, miners will be incentivised to bring on greater supply."

"Demand growth in the new end use sectors, as well as investment demand (coins, bar hoardings or ETFs), therefore will have an increasingly critical influence over the silver market balance in the medium to longer term - and prices."
--

America Falling to Foreign Bank Takeover - PT 1/2

Foreign bho Troops Training To Confiscate Guns of Americans ?

http://www.prisonplanet.com/foreign-troops-training-to-confiscate-guns-of-americans.html
--

Note.
the addicted khazars banksters hungry $power$ by
elites NWO & OWG - 666 bolsheviks banksters work
to control the population etc.
incl. our Jewish brothers and sisters -
to destroy US and make a new ussr -

E.g., dd....
Zionism DataPage Jews Against Zionism:

http://www.rense.com/Datapages/zionismdata.htm

By Brother Nathanael's truth in this debate -
its a banksters super 666 red agenda target goal -

http://www.realzionistnews.com/

Got PM's Ag USA/USSIF Silver Mine penny play
the great profitable silver mines dd.. ..

http://www.us-silver.com

The historic mining town of Wallace
(population 960) is nestled beneath Interstate 90,
halfway between two ski and recreation areas
in northern Idaho's beautiful Silver Valley.

http://wallace-id.com/

http://www.us-silver.com/s/Projects.asp

http://www.us-silver.com/s/PhotoGallery.asp

http://www.us-silver.com/i/pdf/CP_Jan2010.pdf

Sierra Silver Mine Tour -

http://silverminetour.org/

God Bless