ximmy
16th February 2011, 04:51 PM
No overall shortage of physical silver: CPM Group
Washington (Platts)--15Feb2011/633 pm EST/2333 GMT
Tightness in the physical silver market is due to spot shortages of certain high-grade bars, and is not reflective of overall physical supply, according to analysts with New York research firm CPM Group.
"There are rumors of shortages of physical silver circulating in the market. There are some spot shortages, but they appear limited to higher purity metal in specific forms and locations," the analysts said in a report.
Though the supply of 1,000 oz good delivery bars of 0.999% purity is plentiful, supplies of 0.9999% and 0.99999% high-purity bars are less plentiful, the CPM analysts said.
That's because most manufacturers avoid producing high-purity bars in favor of silver sponge, which is favored by companies using the material in electronics applications and solar panels, analysts said.
Investment demand for all types of silver also accounts for some of the tightness in high-purity bars, according to analysts.
Demand for silver from the solar panel sector surged in the second half of 2010, increasing demand for high-purity silver in sponge form. Producers of high-grade silver sponge have increased their production capacity in response, but only a handful of manufacturers currently source silver sponge to the photovoltaic industry, analysts noted.
In addition, "conspiracy theory promoters" have said there were shortages of coins and 100 oz-investment sized bars, the analysts said. "There are no real shortages there."
CPM Group analysts surveyed Fidelitrade, Kitco, and Northwest Territorial Mint in early February about the supply of the metals. "There were hundreds of thousands of ounces in 100 oz bars available for immediate delivery, and NWTM said it was steadily producing more each day," CPM Group analysts said.
In conclusion, CPM analysts agreed there was some spot tightness in high purity silver cast into bars as opposed to sponge. "The rest is noise," they concluded.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/6835535
Washington (Platts)--15Feb2011/633 pm EST/2333 GMT
Tightness in the physical silver market is due to spot shortages of certain high-grade bars, and is not reflective of overall physical supply, according to analysts with New York research firm CPM Group.
"There are rumors of shortages of physical silver circulating in the market. There are some spot shortages, but they appear limited to higher purity metal in specific forms and locations," the analysts said in a report.
Though the supply of 1,000 oz good delivery bars of 0.999% purity is plentiful, supplies of 0.9999% and 0.99999% high-purity bars are less plentiful, the CPM analysts said.
That's because most manufacturers avoid producing high-purity bars in favor of silver sponge, which is favored by companies using the material in electronics applications and solar panels, analysts said.
Investment demand for all types of silver also accounts for some of the tightness in high-purity bars, according to analysts.
Demand for silver from the solar panel sector surged in the second half of 2010, increasing demand for high-purity silver in sponge form. Producers of high-grade silver sponge have increased their production capacity in response, but only a handful of manufacturers currently source silver sponge to the photovoltaic industry, analysts noted.
In addition, "conspiracy theory promoters" have said there were shortages of coins and 100 oz-investment sized bars, the analysts said. "There are no real shortages there."
CPM Group analysts surveyed Fidelitrade, Kitco, and Northwest Territorial Mint in early February about the supply of the metals. "There were hundreds of thousands of ounces in 100 oz bars available for immediate delivery, and NWTM said it was steadily producing more each day," CPM Group analysts said.
In conclusion, CPM analysts agreed there was some spot tightness in high purity silver cast into bars as opposed to sponge. "The rest is noise," they concluded.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/6835535