Silver miner cannot keep up with India, China demand, Prins says

A large pure-play silver mining company told former World Bank and IMF advisor Nomi Prins it cannot produce bullion fast enough to meet physical demand from India, China, Saudi Arabia and Kuwait.

Prins, speaking on the King World News podcast Monday, said the miner's representative told her: "We cannot, quickly enough, satisfy physical silver demand from India, Saudi Arabia, Kuwait, China, etc. Every single ounce is spoken for as it is literally coming out of the ground before it's even processed."

Prins did not name the company, citing the confidentiality of the conversation. She described it as "one of the largest pure play silver miners on the planet."

The claim points to a deepening structural gap between mine supply and industrial and investment buying from Asia and the Middle East. India and China are among the world's largest silver consumers, using the metal in solar panel manufacturing, electronics and jewelry. Saudi Arabia and Kuwait have been heavy buyers of physical bullion and coins during the current precious metals cycle.

"There is a massive distortion happening," Prins said. "If you step back and look at structural gaps and real demand and deficits and supply and the ability to bring supply to the market, there are phenomenal distortions."

The comment comes as silver prices have pulled back from their 2024 highs, trading near $29 per ounce after touching $32 earlier in the year. Spot silver was flat in Tuesday's session, tracking gold's modest decline.

If the miner's account is accurate, it suggests the current price level does not reflect the physical market's tightness. Industrial demand for silver has risen sharply as governments push renewable energy targets. The Silver Institute reported a fourth consecutive structural deficit in 2024, with demand exceeding supply by roughly 5,000 tonnes. Mine output has struggled to keep pace, constrained by permitting delays, ore grade declines and rising costs at existing operations.

Prins said mainstream financial media coverage of daily price moves misses the larger picture. "If you are the Wall Street Journal, Reuters or CNBC, they are basically just saying, 'Things are dipping today. Gold is down, silver is down, the Iran War is heating up,'" she said. "These things are all factually correct at the moment."

The gap between paper prices and physical premiums has been a recurring theme in precious metals markets over the past three years. Physical silver bars and coins have frequently traded at premiums of 10% to 30% over spot during periods of acute shortage, particularly in India and the Middle East.

Prins served as a managing director at Goldman Sachs and has written several books on central banking and commodity markets. She has briefed central bankers and finance officials at the IMF and Federal Reserve.

The podcast interview was published Monday. King World News said the full discussion was available to subscribers.