Silver Dec '17 (SIZ17)
|Tick Size||$0.005 per troy ounce ($25.00 per contract) (Settlement $0.001)|
|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 on or 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) moved higher into April when they posted the high for 2017 at $18.66 an ounce. North Korean geopolitical concerns fueled safe-haven demand for precious metals after President Trump said he may consider military action against North Korea for its ballistic missile tests. Also, political risks in France from its presidential elections in April lent support to silver prices. Silver prices fell back into July when they posted a 1-3/4 year low at $15.15 an ounce as record high stock prices undercut safe-haven demand for precious metals. Also, slack inflation pressures reduced demand for precious metals as an inflation hedge after the U.S. June CPI rose by only +1.7% yr/yr, the smallest pace of increase in two years. Silver prices then turned higher and rallied into year-end as the dollar index tumbled to a 3-year low and on political unrest in Spain after separatists won elections in Catalan in December. Silver prices finished 2017 up +7.3% at $15.99 an ounce.
Supply - World mine production of silver in 2017 fell -2.7% yr/yr to 25,000 metric tons., down from the 2014 record high of 26,800 metric tons. The world's largest silver producers in 2017 were Mexico with 22.4% of world production, Peru with 18.0%, China with 10.0%, and Russia with 6.4%. U.S. production of refined silver in 2017 (annualized through October) fell by -16.0% to 5,503 metric tons, down from the 2011 record high of 6,375 metric tons.
Trade - U.S. exports of refined silver in 2014 fell -6.4% yr/yr to 12.313 million troy ounces, which is a little more than 1/10th of the record high of 99.022 million troy ounces seen in 1997. The major destinations for U.S. silver exports are Canada with 52.2% of the total exports, Singapore with 3.8%, UK with 1.8%, Germany with 1.1% and Switzerland with 1.0%. U.S. imports of silver ore and concentrates in 2014 were virtually zero. U.S. imports of refined silver bullion in 2014 rose +1.6% yr/yr to 125.385 million troy ounces. The bulk of those imports came from Mexico with 54.9%, Canada with 28.7%, and Peru with 2.0%.
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