Something strange took place in the U.S. Silver market last year. It
seems as if the United States imported a record amount of silver in 2016
while its apparent consumption decline considerably. This does
not make sense. Which means, a lot of silver has been acquired and
stored, over and above the quantity needed by the U.S. Market.
According to the most recently released data in the USGS 2017 Silver
Mineral Commodity Summary, U.S. silver imports reached an estimated record
high of 6,300 metric tons (mt) in 2016:
U.S. silver imports last year were 6% higher than 2015 and are 25%
higher than the average for 2012-2014. This is quite
interesting because apparent silver consumption declined considerably last
year. The USGS calculated that apparent U.S. silver consumption
decreased from 8,000 mt in 2015 to 7,230 mt in 2016. This is nearly a
800 mt decline in U.S. silver consumption. However, U.S. silver imports
increased nearly 400 mt last even as consumption declined:
Even though U.S. silver consumption are higher than imports, we must take
into account domestic mine supply and recycling. Also, the USGS
calculates “apparent” U.S. silver consumption by the following:
U.S. Apparent Consumption = Mine production + Secondary
(new & old scrap) + Imports – Exports – Adjustments for Government and
Industrial Stock Changes (including Comex inventories).
So, if overall U.S. silver consumption declined by almost 800 mt, why did
silver imports reach a new record high of 6,300 mt?? It seems as if
some large entities or institutions are acquiring a lot of silver as overall
demand continues to decline.
Furthermore, U.S. silver imports hit another record last year. Total
U.S. silver imports of 6,300 mt accounted for 30% of global mine supply in
2016, up from 21% in 2012:
Thus, U.S. silver imports now account for nearly one-third of
total global mine supply. You will also notice that GFMS –
Silver Institute forecasts that global silver mine supply declined in
2016. Their 2017 World Silver Survey should be out within the next
month.
I am speculating here, but it makes a lot of sense for large institutions
to acquire silver at this low price before the global stock markets
collapse. When the markets finally crash, there won’t be too many
high-quality assets to move one’s funds into.
Even though precious metals sentiment and buying is down the first three
months of 2017 versus last year… I see this as a very interesting
indicator. While some look at this trend as being negative, I look at
it as being… THE CALM BEFORE THE STORM.
Additionally, I continue to see more and more precious metals investors
becoming frustrated or negative because the metal prices or values have not
performed as many have expected. While I thought the gold and silver
prices would correct back higher sooner… I am not at all concerned about the
timing of this event. However, the revaluation of gold and silver is
not decades away as some who believe that the Fed and Central Banks will
continue manipulating the market indefinitely.
The Fed and Central Banks will hit a brick wall and that is due to the
disintegrating energy sector…. especially the U.S. and global oil
industry. Which is precisely why I focus on the energy industry to get
an idea of how close we are to ECONOMIC CLIFF.
Lastly, I will be posting a new interview tomorrow that I had with
Kenneth at Crush the Street last week. I suggested to them
that we do another interview due to several of my followers contacting me
about Charles Savoie of SilverStealers.net statement that the Pilgrims
(Elite) were going to get the U.S. to nationalize silver and only pay $2.00
an ounce.
While I respect Charles Savoie’s in depth research on the Pilgrims
(Elite), I disagree with some of his future assumptions on the silver price
and market. I base this on his lack of understanding of the
energy sector and the ongoing disintegration of the U.S. and global oil
industry. I explain this in detail in the interview.
Check back for new articles and updates at the SRSrocco Report.
