Mexico shuts down silver production

[Saabman]

https://www.kitco.com/news/2020-04-01/S ... ction.html

Expected mine shutdowns of at least a month in Mexico will reduce the global silver supply since the country is the world’s largest silver producer.

Nevertheless, analysts are not rushing to say this will automatically mean higher silver prices, as normally occurs when there are reduced supplies in any commodity. That’s because in this instance, industrial demand is also suffering as the COVID-19 pandemic impacts the global economy.

Further, with refinery and transportation issues but sharply rising physical demand, silver was described as a market “in turmoil.”

The Mexican government this week declared the pandemic as a national health emergency and as a result is forcing all non-essential businesses to close up shop until at least April 30. Silver miners likely are considered non-essential. Some mining and exploration companies have already said they are halting operations.

According to data from the U.S. Geological Survey, in 2019, Mexico produced 6.3 metric tons of silver, which represented about 23% of global mine supply. Statistics from the consultancy CPM Group put 2019 output at around 740 million ounces, of which 173 million were from Mexico.

[Recyclersteve]

This could be YUUUUUGE!

[Saabman]

I thought so too. And honestly, do you think they will be shut down for just a month? I don't.

[Recyclersteve]

I agree that the shutdown will last longer than a month.

Another thing the article mentions about silver is that much silver is flown internationally to get from miners on through the system to refiners, producers of blanks and the U.S. Mint. Mexico and Peru are the biggest producers. Since the number of flights (both domestic and international) has been cut way back, this creates yet another bottleneck for the system.

South Africa announced less than a week ago the shutdown of production- this could greatly affect both platinum and palladium.

Sales of ASE's at the U.S. Mint went from 650k in February to a whopping 5.5 million in March.

In the article above, silver was described as a Sleeping Beauty just waiting to be woken up.

Buckle those seat belts!

[Saabman]

I agree...... it's going to be one helluva ride soon......

Stay safe!

[Know Common Cents]

Rig for silent running, but brace for depth charges!

[thecrazyone]

Can't wait to sell my teeny tiny 1g silver bar I just got! [laughs]

[InfleXion]

This will have supply impacts for the foreseeable future. It might take some time, although not likely with the Fed printing another $2+ trillion just this morning, but if the day ever comes where every person the US wants to own 3 ounces of silver, supply's out (1 billion above ground available oz according to Bix Weir). With the ability for mines to quickly play catchup now sunsetting for a while, price will have to rise at some point, and JPM knows this as they are net long. Even if the people don't embrace silver, industrial demand isn't going anywhere as long as the economy is functioning, and industry will pay whatever it takes since they can pass costs on to customers.