Why Is The U.S. Importing So Much Silver Bullion??

by Steve St. Angelo, SRSrocco Report

Something very interesting took place during the first two months of 2015.  U.S. silver bullion imports increased significantly compared to the same period last year.  Now, this has nothing to do with the supposed increase of JP Morgan silver inventories as that took place starting in March.

During the first two months of 2014, the United States imported 583 metric tons (mt) of silver bullion, 335 mt for January and 248 mt in February.   This turns out to be 18.7 million oz (Moz) of silver bullion.  However, something changed in 2015.

Not only did U.S. silver bullion imports increase this year…. they surged 44% to 838 mt:

U.S. Silver Bullion Imports 2014 vs 2015

The U.S. imported 421 mt of silver bullion in January and 417 mt in February.   This was an increase of 255 mt, or 8.2 Moz…. in just two months.  Why would the U.S. be importing more silver bullion?  That’s an excellent question.  First, let’s take a look at where this silver came from.

Last year, of the total 583 mt of U.S. silver bullion imports during Jan and Feb, 562 mt came from Mexico and Canada.  These two countries accounted for 96% of the total U.S. silver bullion imports.  If we look at the chart below, we can see the change in 2015.

U.S. Silver Bullion Imports JAN-FEB 2015 #1

While Mexico and Canada still account for the majority of silver bullion imports (82%), the U.S. also received a significant amount from S. Korea (54 mt), Poland (40 mt), Bolivia (30 mt), Germany (18 mt) and Peru (8 mt).   Why did the U.S. need to access additional silver bullion from S. Korea, Poland, Bolivia and even Germany?

Well, if we look at the three major market indicators below, we can certainly see that these do justify increased silver bullion demand:

1) U.S. Industrial silver consumption continues to decline

2) U.S. Silver Eagle sales were flat year-over-year.

3) Comex silver inventories JAN-FEB net build was only 1.3 Moz

According to the recently released 2015 World Silver Survey, U.S. industrial silver fabrication continued to fall in 2014.  Total U.S. silver fabrication declined from 138 Moz in 2011, to 132.7 Moz in 2012, 127.4 Moz in 2013, and down again in 2014 to 125.4 Moz.  So, if U.S. Q1 2015 GDP was only 0.2%, I would imagine U.S. consumption of industrial silver also declined.

Now, if we look at the change in U.S. Silver Eagle sales… this doesn’t help us either.  The U.S. Mint sold 8.5 million Silver Eagles during the first two months of 2014 as well as 8.5 million in 2015.  As we can plainly see, no need for more silver at the U.S. Mint.

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