#silversqueeze

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Goldhedge said:
I wonder why they need silver at such high purity. Wouldn't gold be a better alternative?
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Nope, remember SIlver has the Highest Conductivity. So whatever the application is they must need absolute best conductivity they can achieve. Impurities would also greatly affect the conductivity at very small levels. I imagine for something like a magnetic sensor (magnetism then induces the current) that the absolute best conductivity would result in the Best sensor / most sensitivity to sensing whatever they are trying to find.

Think of impurities as that Slow Ass driver in the Left lane. Just one stupid Copper ion could back up the whole road.
 
pmbug said:
I don't buy it. I think the silver for missiles/military demand is an overblown narrative. It's pretty clear that refineries around the world (the western world anyway) are working hard to produce good delivery metal for London (and Perth in Australia making kilo bars for China/SGE/SFE).
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When did the good delivery bar specs change? I imagine they haven't changed in purity needed in well, like ever. Plus, if you are running a refinery what customer are you going to listen to and send to first? The one that pays the most and gives you the best margin right? No one will pay more than the military for extremely pure product.
 
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I went and found the LBMA good delivery bar specs. Ya, this isnt't that hard. Most any bar I have of silver would/should qualify. Would be EASY for a refinery to melt and recast. So I don't buy this as a good reason for the refinery backup. Perhaps it would be a volume issue but melting 3 9's silver to remake bars could be done incredibly fast. Five 9's silver would be 999.99 per thousand silver.

Technical Specifications

www.lbma.org.uk www.lbma.org.uk

The permitted dimensional ranges for a silver Bar are as follows:

  • Length (Top): 300 mm +/- 50 mm Undercut: 5º to 15º.
  • Width (Top): 130mm +/- 20 mm Undercut: 5º to 15º.
  • Height: 80 mm +/- 20 mm.
Fineness: the minimum acceptable fineness is 999.0 parts per thousand silver.
 
I did not save the page where I read it, but there is little actual difference between three 9s and four 9s fineness. I don't think that level of purity of bars has anything to do with the refinery backlog. There is a big difference between 90% or 92% silver and 99% however.
 
Trust me.... there is a small difference. I mean, let's do the math for a 1,000 oz bar.

That is 31,103.4768 grams. A 3 nine bar could therefore have a maximum of 31.1 grams of impurities
A 5 nine bar would have a max of 0.311 grams of impurities

So the difference is a maxiumum of 30.788 grams of impurities.
I would not fault anyone for saying that is a relatively small difference. And that is true.

However, if you MUST have that superior fineness it takes a LOT of work to remove those additional 30.788 grams of impurities.
 
Voodoo said:
Nope, remember SIlver has the Highest Conductivity. So whatever the application is they must need absolute best conductivity they can achieve. Impurities would also greatly affect the conductivity at very small levels. I imagine for something like a magnetic sensor (magnetism then induces the current) that the absolute best conductivity would result in the Best sensor / most sensitivity to sensing whatever they are trying to find.

Think of impurities as that Slow Ass driver in the Left lane. Just one stupid Copper ion could back up the whole road.
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It matter most in the manufacture of semiconductors. There are lots that get rejected because of impure water, metal irregularity and even the motion of the earth and vibration during the manufacturing process.
 
Well impurities sure. I did some things making doped silicon. But that was for like 100 nm stuff. I dont know how they even accomplish the new what like 2 nm? That doesn't seem possible even to me.
 
Global free float vault stock at the beginning of November was purportedly 19,094.174 metric tons (see here for details). This is 608.122 metric tons less than what was reported two months ago at the beginning of September.

There is good reason to think that the global free float is actually much less than that given that JPM told India that they would have to wait until November to receive silver they bought from the LBMA in October. I have estimated that the LBMA might still owe India ~690 metric tons of silver.

We can derive two cases for upper and lower bound estimates.

Lower Bound

Assume global free float silver vault stock is 19,094 reported - 690 encumbered = 18,404 metric tons. That would be 591,702,300 troy ounces. Let's continue to assume an average cost of $60/ozt in a hypothetical scenario where buyers acquire all available free float silver.

In that scenario, the total global free float of vaulted silver represents $35,502,138,000 or $35.5B.

Upper Bound

Assume global free float silver vault stock is 19,094 as reported. That would be 613,886,400 troy ounces. Let's continue to assume an average cost of $60/ozt in a hypothetical scenario where buyers acquire all available free float silver.

In that scenario, the total global free float of vaulted silver represents $36,833,184,000 or $36.8B.

Conclusion

The silver ocean (global free float) is still evaporating. Two months ago, this exercise estimated the value of the silver ocean at $38.6B. In two months, the silver ocean has shrunk by roughly $2B to $3B.

As a reminder, this represents just 0.178% to 0.184% of the $20T that is purportedly currently available capital. That's all it would take to wipe out every troy ounce of silver that is currently available in the world's major exchange vaults (LBMA, COMEX and SGE/SFE).

The silversqueeze is going to be epic.
 


At the beginning of November, LBMA free float appeared to be ~5,805 tonnes. I estimated that they likely still owed India around 690 tonnes from October purchases that JPM told them would be delayed. Two weeks into November and ETFs have acquired 302 tonnes of LBMA silver.

If my estimate was near the mark, that's almost 1,000 tonnes gone from the free float. As @mypreciousilver reminds us, the LBMA ran dry in September while still reporting a free float just under 3,500 tonnes.

If we extrapolate from these data points, it would seem that the LBMA has a de facto / liquid / unencumbered and actually available free float of around 5,805 - 1,000 - 3,500 = ~1,300 tonnes (less whatever new purchases/deliveries have accrued in November so far).

India is supposedly on track to buy 1,000 tonnes of silver per month for November and December. If that holds up, the LBMA is going to have a very stressful Christmas!
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