Mexico-focused miners bullish on silver despite price slump

Mexico-focused miners remain bullish on long-term silver prices despite the recent drop, with surging demand from key growth sectors likely to outstrip supply.
Silver miners have seen margins dip as prices plummeted to US$17.77/oz at the start of September, bnamericas.com said. The metal has regained some ground, trading in the US$18-19/oz range in the last week, but some experts are warning of further potential falls in the near term.
“There are factors that have emerged over the last few months that suggest gold and silver prices have some further downside potential at least in the short term,” CPM Group’s Jeffrey Christian.
Capital Economics expects silver to end the year at US$18/oz, in part due to weak demand from the electronics industry, while BMO Capital Markets lowered its 2023 average price forecast by 6% to US$19.90/oz, Kitco News reported.
“But 3-5 years from now, we’re going to have higher silver prices,” said Dan Dickson, CEO of Endeavour Silver, which has two primary silver mines and three silver projects in the country.
This rise will be driven by growing demand from increased electrification, including in electronic devices, electric vehicles (EVs) and solar panels.
“With governments around the world pushing electric cars, and some cities banning fuel combustion cars, the automotive sector is going to have to produce a lot more electric cars, so that’s going to consume a lot of silver,” said Keith Neumeyer, CEO at First Majestic Silver, which operates the San Dimas, Santa Elena and La Encantada silver-gold mines in Mexico.
Mexico is the world’s dominant silver producer, with output of 5,600t (180Moz) in 2021, with Peru third at 3,000t, and Chile, Bolivia and Argentina all in the top 10, according to the US Geological Survey.

Alex Shishlo for Rough&Polished