Foxorox AI Market Forecast – 2025-12-17

AI-generated analysis combining predictive modeling and recent market context.

1. Global silver production — scale and structure

1.1 Largest silver-producing countries (mining)

Global silver production is about 25,000 tonnes per year. The largest producers are:

Poland (KGHM) is in the Top 5–6 silver producers globally.

1.2 Key market characteristic: silver as a by-product

• Most silver is not mined as a primary metal.
• Silver largely comes from operations producing copper, zinc, lead and gold.

1.2 Key market characteristic: silver as a by-product

• Most silver is not mined as a primary metal.
• Silver largely comes from operations producing:
  • copper
  • zinc
  • lead
  • gold

2. Why silver prices can rise even if “there is a lot of it”

2.1 Market deficit

• The global silver market has operated in a deficit for several years:
  • demand > mined supply + recycling
• The deficit is covered by drawing down inventories.

2.2 Lack of supply elasticity

• Silver mining capacity cannot be expanded quickly:
  • new mines typically require 10–15 years (permitting, capex, infrastructure)
• In by-product operations, you cannot simply “turn a knob” to produce more silver.

2.3 Demand

Silver demand comes from:

• industry (electronics, energy, technology)
• investment (coins, bars, ETFs)
• hedging against inflation and systemic risk

3. Is an increase in mining capacity expected?

3.1 Global picture

• Forecasts point to flat or only slightly increasing silver production.
• There is no indication of the market being “flooded” with new supply.

3.2 Country-by-country analysis

Mexico

The largest upside potential, but:

• frequent strikes
• ore grade variability

Positives:

• return of major mines to full operations
• new projects (e.g., Terronera)

Conclusion: upside potential exists, but it is volatile.

Peru

• risk of declines in production
• silver heavily linked to Pb/Zn operations

Conclusion: stagnation or a mild decline is more likely.

China

• stable production
• limited supply response to higher silver prices

Conclusion: higher silver prices do not automatically mean higher silver output.

Poland (KGHM)

• strategy: maintain roughly ~1,200 tonnes per year
• no plans for a rapid expansion of silver output
• silver fully dependent on copper mining/processing

Conclusion: stabilization, not expansion.

Bolivia

• large volumes
• dependency on polymetallic mines

Conclusion: variability is possible, but no structural “breakthrough” is indicated.

Russia

• new projects exist
• high logistical and geopolitical uncertainty

Conclusion: theoretical potential, practical uncertainty.

Chile

• downward pressure in output
• silver is only an add-on to other metals

Conclusion: outlook is weak without major changes in base-metal production.

USA

• gradual increase
• expansions of existing mines

Conclusion: moderate growth, not a step-change.

4. “Today’s” silver price (as stated in the conversation)

• Spot silver price: approximately 57–62 USD per ounce
• 1 troy ounce = 31.1035 g

5. KGHM — silver significance in numbers

5.1 Output

• 1,200 tonnes of silver per year
• Equivalent to:

1200 tonnes ≈ 38.58 million troy ounces
    

5.2 Market value of KGHM silver output (USD)

At a silver price of 62–65 USD/oz:

• ~2.2 – 2.4 billion USD per year

5.3 Value in PLN (indicative)

At an assumed USD/PLN rate of ~4.25:

• ~9.4 – 10.2 billion PLN per year

(This is an indicative conversion; USD/PLN varies.)

5.4 What this means in practice

• Silver is one of KGHM’s key assets.
• However:
  • cost attribution is primarily linked to copper
  • silver improves margins
  • at high silver prices, KGHM acts as a natural hedge

6. KGHM revenues — financial context

Q3 2025

• Revenue: ~8.3 billion PLN

9M 2025

• Revenue: ~25.9 billion PLN

7. Final conclusions

1. Silver prices rise because:
   • the market is in deficit
   • supply is rigid
   • structural industrial and investment demand is growing
2. There is no quick way to increase supply even at high prices.
3. KGHM is one of the world’s largest beneficiaries of high silver prices, even though:
   • silver is a by-product
   • the company does not plan to materially increase silver output
4. At high silver prices:
   • cash flows improve
   • resilience to copper price declines increases
   • the strategic importance of KGHM’s asset base rises