Tue, Mar 28, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

CPM Group Silver Long-Term Outlook: Silver prices to remain at historically high levels over the next 10 years

Friday, December 10, 2010
Opalesque Industry Update - Silver prices are projected to remain at historically high levels over the next ten years. That is the primary price conclusion of the 2010 edition of CPM Group’s Silver Long-Term Outlook, released today by the New York commodities research and advisory firm.

The 224-page study is a comprehensive analysis of the key market fundamentals of silver that are expected to influence the price of silver over the coming 10 years, through 2019. The report contains projections for global mine production through 2019 on a mine-by-mine basis and provides a detailed analysis of country-by-country silver output. The report also contains a new China section, which provides a thorough analysis of the silver supply and demand of this previously opaque market. It appears that silver use in China as of 2009, was perhaps twice as large as had been believed earlier, the report concludes.

Major uses of silver are discussed in detail, as are relatively new sources of fabrication demand for silver that have been emerging in recent years, such as solar panels. The report also contains analysis on potential new sources of silver fabrication demand that could emerge in the future. Investment demand, a significantly important factor influencing the price of silver, is discussed at length in this report. The Silver Long-Term Outlook provides 10-year projections of supply, demand, and prices under a base case and two alternative scenarios.

Strong investment demand, the single most important factor in influencing the price of the metal, is expected to keep silver prices at elevated levels during the projected period. Investors who view silver as a safe haven asset are expected to continue buying large amounts of silver over the next couple of years as uncertainty regarding global economic growth, financial market instability, and volatility in major currency markets persist. As these concerns recede later in the decade, investment demand is projected to decline. Silver prices are expected to weaken alongside the decline in investment demand as the decade progresses.

Fabrication demand for silver is forecast to rise over the projected period, providing additional support to prices along with strong investment demand. Even in present economic conditions there is strong demand for some of the products in which silver is used, including various electronic components used in a full range of consumer and industrial equipment. Fabrication demand for silver is expected to rise further over the next few years, due to an anticipated improvement in global economic activity coupled with increased use of silver in some of its new and relatively new uses, such as solar panels, silver-zinc batteries.

Primary silver mine production is expected to increase in response to the high price of silver and the relatively low cash and total operating costs. A majority of silver is produced as a byproduct of gold, copper, lead, and zinc, however. The fundamentals for these metals are forecast to be supportive of their prices at least during the initial years of the projected period, which is expected to boost mine production of these metals and as a result that of byproduct silver. During the second half of the forecast period net additions to silver mine supply are expected to decline. This slowdown in net additions is forecast to support silver prices during that time.

This year CPM Group has been able to integrate Chinese silver market supply and demand statistics into its global supply and demand model. The lack of sufficiently reliable statistics on silver fabrication demand and secondary recovery prior to now prevented China’s inclusion in international statistics. CPM has developed what it feels are sufficiently reliable statistics on silver fabrication demand by major industrial category and scrap recovery, relying on a network of industry associations and industrial participants in these markets. Silver use in China is estimated to have risen around three and a half times over the last decade, from 40.8 million ounces in 2000 to 139.2 million ounces in 2009. As mentioned above, CPM’s work indicates that silver use is roughly twice as large as had been suggested by commentators in the western market. Chinese silver fabrication demand is projected to account for nearly a fifth of global silver fabrication demand this year.

The CPM Group Silver Long-Term Outlook is part of a series of long-term studies of precious metals markets. These studies are used by producers for strategic planning and in the preparation of technical reports. In addition, institutional investors and physical traders supplement their internal research with CPM Group’s comprehensive analyses, conclusions, and projections. The reports also serve as authoritative reference guides for silver market statistics. CPM Group sells the reports as stand-alone products, although most clients use the CPM Group reports as parts of broader advisory programs related to the specific metals markets. In addition to silver, CPM Group produces long-term studies with 10-year projections of price, supply, and demand for gold, platinum group metals, molybdenum, vanadium, and other commodities. These projections and reports are updated at least once a year...To access full report:Source
KM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He