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MINING.com reported that according to a recent Capital Economics report, the silver price may fare better during the second half of 2015, and continuing on to 2017.
MINING.com reported that according to a recent Capital Economics report, the silver price may fare better during the second half of 2015, and continuing on to 2017. The firm believes that silver supply will decrease as by-product output from lead, zinc and other mines declines.
As quoted in the market news:
Capital Economics expects the decline in gold and industrial metals prices (copper was trading barely above six-year lows on Wednesday and zinc’s 2015 rally has evaporated) and subsequent capex cuts will therefore hasten the decline in silver supply.
“About 35% of silver comes from lead and zinc mines. While the zinc price is up 10% since July 2012, the lead market has been plagued by years of negative performance prompting production to fall by 6% in 2014. What’s more, zinc’s positive price performance has been driven by mine closures that have removed about 1 million tonnes of supply since 2013.
“While efforts are being made to restart some idled mines and to expand existing mining projects, there is limited investment going into new mine capacity. As a result, silver as a by-product could start to dry up soon, leading to a much sharper slowdown in output than we had originally anticipated.”