Silver Aug '20 (SIQ20)
|Tick Size||$0.005 per troy ounce ($25.00 per contract) (Settlement $0.001)|
|Daily Limit||5% above or below previous settlement|
|Contract Size||5,000 troy ounces|
|Trading Months||Mar, May, Jul, Sep, Dec (H, K, N, U, Z)|
|Trading Hours||5:00p.m. - 4:00p.m. (Sun-Fri) (RTH 7:25a.m. - 12:25p.m.) (Settles 12:25p.m.) CST|
|Value of One Futures Unit||$5,000|
|Value of One Options Unit||$5,000|
|Last Trading Day||Third last business day before the maturing delivery month|
Silver is a white, lustrous metallic element that conducts heat and electricity better than any other metal. In ancient times, many silver deposits were near the earth's surface. Before 2,500 BC, silver mines were worked in Asia Minor. Around 700 BC, ancient Greeks stamped a turtle on their first silver coins. Silver assumed a key role in the U.S. monetary system in 1792 when Congress based the currency on the silver dollar. However, the U.S. discontinued the use of silver in coinage in 1965. Today Mexico is the only country that uses silver in its circulating coinage.
Silver is the most malleable and ductile of all metals, apart from gold. Silver melts at about 962 degrees Celsius and boils at about 2212 degrees Celsius. Silver is not very chemically active, although tarnishing occurs when sulfur and sulfides attack silver, forming silver sulfide on the surface of the metal. Because silver is too soft in its pure form, a hardening agent, usually copper, is mixed into the silver. Copper is usually used as the hardening agent because it does not discolor the silver. The term "sterling silver" refers to silver that contains at least 925 parts of silver per thousand (92.5%) to 75 parts of copper (7.5%).
Silver is usually found combined with other elements in minerals and ores. In the U.S., silver is mined in conjunction with lead, copper, and zinc. In the U.S., Nevada, Idaho, Alaska, and Arizona are the leading silver-producing states. For industrial purposes, silver is used for photography, electrical appliances, glass, and as an antibacterial agent for the health industry.
Silver futures and options are traded at the CME Group and the London Metal Exchange (LME). Silver futures are traded on the Tokyo Commodity Exchange (TOCOM). The CME silver futures contract calls for the delivery of 5,000 troy ounces of silver (0.999 fineness) and is priced in terms of dollars and cents per troy ounce.
Prices - CME silver futures prices (Barchart.com symbol SI) drifted lower into Q2-2019 and posted the low for 2019 in May at $14.245 per troy ounce. Heightened U.S.-China trade tensions reduced economic growth expectations and weighed on silver due to weakened industrial metals demand. Silver prices then trended higher into September 2019 when they posted a 3-1/2 year high of $19.540 per troy ounce. An increase in geopolitical tensions boosted safe-haven demand for precious metals. Silver prices were boosted by U.S.-China trade tensions, mounting political uncertainty in the UK over Brexit, and violent confrontations in Hong Kong. Long silver positions in exchange-traded products rose to an all-time high in September 2019 of 638.841 million ounces. Silver prices fell back slightly in Q4-2019 as the dollar index climbed to 2-3/4 year high, and as safe-haven demand for silver fell after U.S. equity markets soared to new record highs as the U.S. and China moved toward their phase-one trade agreement in December 2019. Silver prices finished 2019 up +15.3% yr/yr at $17.92 per troy ounce.
Supply - World mine production of silver in 2019 rose +0.4% yr/yr to 27,000 metric tons, to match the 2015 record high. The world's largest mine producers in 2019 were Mexico with 23.3% of world production, Peru with 14.1%, China with 13.3%, Poland with 6.3%, and Chili with 4.8%. U.S. production of refined silver in 2019 (annualized through September) rose by +1.9% yr/yr to 4,773 metric tons, which was well below the 2011 record high of 6,375 metric tons.
Trade - U.S. imports of silver bullion in 2019 (through September annualized) rose +1.2% yr/yr to 3,796 metric tons. The bulk of U.S. silver imports come from Mexico and Canada.
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