| Bullion silver is likely to be less pure than coins or small bars, but 1,000 ounce bullion silver bars are cheaper per ounce than the smaller fabricated sizes. Bullion silver is typically available for only a few cents more per ounce than the spot price in the paper futures market. So long as bullion bars can always be purchased at little more than spot price, a business that simply melts the bars would never pay more to melt fabricated silver, even if it is more highly refined.
If the business could not buy cheap bullion bars locally, it would simply go long a futures contract and then stand for delivery of the physical bullion silver.If a company cannot get bullion bars from the futures market to consume for its production needs, then there will be a delivery default on the futures exchange...............................................Full Article: Source
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