Silver demand still exceeds supply

Global silver production during 1999 is expected to have reached 552 million oz., a 3% increase over final figures reported a year earlier, according to the Silver Institute of Washington, D.C.

Mexico is expected to have remained the world’s top producer, at 91 million oz. in 1999, and, in 2000, Mexican production will rise to a projected 106 million oz. Peru, the world’s second-largest producer, is expected to have produced about 66 million oz. last year, rising to a projected 65 million oz. this year. In third place is the U.S., with 1999 production of roughly 63 million oz. and projected 2000 output of 66 million oz.

Between 1999 and 2002, production is likely to increase 10%, averaging 14 million oz. of additional output per year. Silver production by 2002 is expected to reach 593 million oz.

Silver production continues to fall short of demand. Throughout the past decade, silver demand outpaced mine production by an average of 261 million oz. per year. In 1998, the gap was 295 million oz.

Even the addition of recycled scrap to the market was unable to offset supply shortfalls, as has been the norm. Between 1990 and 1998, total fabrication demand exceeded production by 2.4 billion oz., which resulted in the drawing down of above-ground inventories by 1.1 billion oz.