Similar to gold, the silver industry is impacted by COVID-19. Although this hasn’t triggered any major problems just yet, that situation may change soon. Several companies are struggling to move their silver supply across borders.
Silver Logistics Worsen
It was somewhat to be expected that COVID-19 would continue to wreak havoc throughout 2020. With new infections popping up globally, the same issues which arose several months ago will come into play once again. For companies active in the precious metals industry, this will mean logistical problems more often than not.
Albeit there have been signs of a looming silver shortage, the situation may grow worse. Any company producing silver in Mexico and Argentina will run into export issues. Travel restrictions have been imposed once again, making it very difficult to move metals to other countries.
In Argentina, for example, the number of flights coming out of the southern part of the region is virtually nonexistent. Mining operations in that part of the country cannot export their ore, bars, or other goods conveniently. Getting workers to and from these locations can be equally problematic.
Overall, the situation in Mexico is relatively similar. Logistics remain a key problem for as long as COVID-19 continues to claim victims. As the global rate of infection is ramping up – primarily in Middle and South America – it seems unlikely that things will improve.in the foreseeable future.
Lower Production Equals a Higher Price?
On paper, the silver price will rise if the production and supply is lower than normal. COVID-19 may prove to be an interesting catalyst in this regard. Silver has many industrial use cases, as it is found in a lot of products and goods. That demand will not necessarily slow down all that much during this pandemic.
In fact, some industries note stronger demand for silver than normal. An interesting turn of events, and combined with a decrease in production, anything can happen. At the same time, it is possible that production will be able to ramp up again in the near future. It is unclear what effect that would have on the current silver price trend.
Solving logistical issues is never done overnight. Especially not when so many external factors tend to disrupt one’s plans. As the overall available supply of the precious metal keeps shrinking, interesting things are bound to happen. What those things are exactly, remains unknown.