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Silver Surplus And Supply Forecasts

Silver Surplus and Supply ForecastsSilver investors may want to prepare for a feast: the silver market is reportedly already in surplus and an array of miners have forecast production increases for this year.

The silver market has been in surplus for the past several years and is expected to remain so in 2013, Anne-Laure Tremblay, precious metals analyst at BNP Paribas, said in the London Bullion Market Association's (LBMA) 2013 silver forecast.

In a recent interview with Mu Li, a CPM Group analyst, Kitco's Daniela Cambone asked for confirmation on reports indicating that there is currently a 207-million-ounce silver surplus.

Li confirmed that the silver market is still in surplus. Investors have been absorbing the surplus metal, but, she added, there is no real shortage of metal in this market.

As miners report their fourth-quarter and 2012 year-end results, many are also issuing 2013 forecasts. A review of these announcements reveals that many companies not only experienced growth last year, but also expect further production increases this year; they plan to do their part to keep the silver market well supplied in 2013.

Hecla Mining (NYSE:HL) was established in 1891. The company made headlines last week when it announced that its silver reserves have reached the highest levels in its history. Hecla also reported 2012 silver production of 6.4 million ounces and stated that it expects that amount to increase by 25 percent this year, to about 8 or 9 million ounces.

First Majestic Silver (TSX:FR,NYSE:AG) has seen its production increase for nine years in a row, reaching 8.26 million ounces in 2012. The company expects the growth to continue, noting in a press release that its silver production could reach 11.7 million ounces this year.

2012 marked the sixth year of production growth for Fortuna Silver Mines (TSX:FVI,NYSE:FM). The company reported output of 4 million ounces, a 59-percent increase over 2011. This year, Fortuna expects to produce 4.4 million ounces of silver.

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