Silver output grows 5 percent, led by one primary mine in Latin America. Industrial thrifting now hurting scrap supply.
[This article originally appeared on BullionVault and is republished here with permission.]
Silver mining output hit a new record in 2014, says authoritative market data, growing for the 12th consecutive year.
But for the global market, according to figures in the new World Silver Survey from Thomson Reuters GFMS, that 1,300-tonne growth in silver mine output was more than halved by another drop in scrap flows, with the recent "thrifting" by industrial users of the metal starting to hit the supply chain of recovered and recycled silver.
Total supply to the market grew 6.1% to 27,300 tonnes on GFMS data, published for the mining, refining and dealer-backed Silver Institute in Washington.
Scrap metal as a share of that total—recovered from electrical and electronic waste, or recycled from old jewelry, bars and coins—fell below 16% from the previous 5-year average of 22.5%.
South America led the growth in mining output, with the continent's silver mine production jumping 17% as Guatemala alone tripled its output thanks to the start of commercial production at Escobal, a high-grade deposit—and the world's third largest silver mine—owned and operated by Tahoe Resources (NYSE:TAHO).
Opening in September 2013, Escobal produced 630 tonnes of silver in 2014, contributing perhaps 2% of Guatemala's entire GDP.
Tahoe's stock price fell 15% across 2014 as silver bullion prices lost another one-fifth, extending the one-third plunge of 2013.
Primary projects such as Escobal—where silver is the major output, rather than a byproduct of mining other metals—led the more global growth in 2014 silver mine output, says the GFMS report, growing 8% from 2013 to account for almost one ounce in every three produced worldwide.
Of last year's 650-tonne growth in primary silver output, Escobal delivered 87%.
Scrap silver supplies, in contrast, dropped by 750 tonnes last year—one-eighth below 2013's level—to hit the lowest tonnage on Thomson Reuters GFMS's records since 1996.