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Michael Fuljenz, president of Universal Coin & Bullion and chair of the National Coin and Bullion Association American Silver Eagle sales committee, said that there are systemic issues impacting the production and supply of American silver bullion coins. He added that these issues could continue to persist in 2023, which means consumers will continue to face persistently high premiums.
Fuljenz said the biggest problem is that the mint buys silver blanks from private mints. Blanks are silver disks that are then transformed into coins.
Analysts have noted that the U.S. Mint has had difficulty maintaining its supply of blanks as it competes with growing overseas demand.
"The U.S. Mint either needs to start making their own blanks or be more competitive and pay more or loosen their conditions when it comes to buying them," said Fuljenz. "If the Mint had more blanks, they would probably have had sales matching 2020 and 2021, and premiums would not have risen from about $3 over the spot silver price to $14 over the spot silver price in two years."
Tom Power, president, and CEO of Sunshine Mining, which supplies the majority of the U.S. Mint's silver blanks, said his company is running at full capacity trying to keep up with growing global and domestic demand.
He added that the silver market continues to deal with supply chain and production issues, particularly a shortage of skilled labor.
"There is no shortage of silver or the raw metal out there, but there are still ongoing production issues as we all continue to suffer from a labor shortage," he said. “This has been going on for two years now and we could see it last another year or two."
Power added that even if he could increase capacity at Sunshine, it would take 12 to 16 months to get the equipment he would need.
"We are giving the U.S. Mint everything we can afford to give them," he said.
Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices