Stock exchange news. In order to understand how prices of silver change, one ought to be aware of stocks relationship, production, demand, and supply for this metal. Political situation is an important factor that influences the price rise. Like gold, silver does not undergo technical analysis, and the prices can continue growing even due to the fact that investors go to a shelter zone. Nevertheless, one ought to be aware of the market situation.
According to United States Geological Survey - USGS, world stocks of silver make up 512 ths. tons. Its major amount is concentrated in Peru – 23%, further follow Chili – 14%, Australia – 14%, Poland – 14%, China – 8%, Mexico – 7%, and the USA – 5%. The yearly recovery of silver in the world amounts to about 20 ths. tons. 22.8 ths. tons of silver was recovered in 2010. If the level of recovery of silver remains within 22 ths. tons, then the world stocks will be sufficient for another 22 years. Peru is the main producer of silver; it obtains about 17% of the world recovery.Besides, in 2010 Peru increased recovery by 3.98 ths. tons. Moreover, the share of Mexico in world recovery amounts to 15%. Russia occupies the 6th position in the list of producers, with a share of 6%. It is worth mentioning that in 2010 Russia did not fall behind other countries and increased recovery by 1,356 tons.
As analytics of METALRESEARCH company believe, by 2012 world recovery of silver will increase to 24 ths. tons, which will amount to 5%.
Among the largest world companies that produce silver such companies as BHP, INDUSTRIAS PENOLES, and AURUBIS are to be mentioned. The share of these companies in the general production volume amounts to 25%. The last position at the world market is occupied by Russian companies. For example, Polimetal, OJSC, according to the results of 2010, has occupied the 11th position among main producers.
Speaking about import in 2010, the import of silver ores and concentrates has decreased to 323 ths. tons, by 2%. The lion’s share in purchasing silver ore and concentrates in 2010 was performed by China. It has amounted to 70% of the world import, whereas Russian import has amounted to 16% of the world import.
During the same 2010 export of silver has increased by 60%, which has amounted to 500 ths. tons. The main exporters of silver ores and concentrates are Australia – 31% of the world export, Korea – 21%, Honduras – 12%, and Tanzania – 11%. In general, the abovementioned countries exported more than 70% of silver ores and concentrates in 2010.
However, in 2010 the volume of world silver trade lowered to a money equivalent of 13 billion dollars. The main traded segment was untreated silver, the share of which in the general volume of trade has amounted to 77%, 16% is made up by silver in half-treated forms, and only 7% of silver powder. In 2011, according to the forecast of METALRESEARCH analytics, world silver trade will rise by 17.8 billion US dollars, which will amount to 37.5%.
Russia mostly imports silver that make up parts of jewellery, its import as a raw material is rather small.
METALRESEARCH analytics suppose that in 2011 silver supply to the world market will increase to 35.7 ths. tons, which will amount to 1.9% of silver supply in 2011 (35.021 ths. tons).
Demand for silver in 2010 decreased to 28.0 ths. tons, having amounted to 1.8%. The major part has been assigned to industrial demand, the share of which has amounted to 44.5%. Investments made up a 30.6% share. Within the general demand jewellery production makes up 24.9 %. METALRESEARCH analytics predict that in 2011 demand for silver will increase to 28.4 ths. tons or by 1.2%.
In 2010 supply dropped to 35.0 ths. tons, which has amounted to 0.8%, whereas demand dropped to 28 ths. tons, or by 1.7%. The balance of silver at the world market has shown a 7 ths. ton surplus. Supply and demand, according to the forecast of METALRESEARCH analytical group, will increase in 2011 and the surplus will amount to 7.3 ths. tons of silver, as a result of which some corrections of market prices is to be expected.
Silver is gaining power, once the level 37.0 was broken silver has risen by almost 11%, having shown the best value for money. A very strong signal of 20 ЕМА and 50 ЕМА crossing shows a further growth of this metal.
After a May decline in the price of silver from almost 50 dollars per ounce to the level of 32-33 dollars per ounce, price of silver remains at the same level of support of 38.2%, not being able to set below it, as explained by experts of the Department of In-Depth Trade System Study of Masterforex–V. But if it manages to set below the abovementioned support, the movement of price to the level of 29.26 is to be expected.
Breaking MF pivot will make further rise of silver price more probable.
