Rising demand, falling mine supply to be favorable for Silver

UNITED STATES May 03 2016 2:26 PM

NEW YORK (Scrap Register): TD Securities looks for both supply and demand to be favorable for silver prices. There are growing expectations for silver demand to be strong, particularly with China’s economy showing signs of stability, said TDS.

“The improved industrial demand outlook for silver, which is estimated to be up by over two percent this year, is important as it represents well over half of global demand,” analysts at TDS added. 

Meanwhile, the mine supply of silver is slowing, TDS said. Primary mine-supply issues in Mexico and Australia, as well as less byproduct supply expected from mining of gold and base metals, are leading to lower silver-mine supply estimates versus 2015 by roughly minus 2%. 

“An increasing segment of the analyst community -- including TD Securities -- project a deficit in the physical market this year, as the global demand improvements, driven mainly by China, overtake the shrinking supply side,” TDS added. 

The firm later added that, “The combination of improved precious metals sentiment, less mined material and an increase in hoarding represents a strong possibility that markets will start pricing in tighter supply-demand fundamentals as Q2-2016 unfolds.”