ABC Bullion Market Indicator - ABMI

STKR

STKR

Well-Known Member
Silver Stacker
I often study the product listings and availability of Silver at ABC Bullion.

https://www.abcbullion.com.au/store/silver

ABC are a big player in the market. IIRC they're the biggest silver refiner in the southern hemisphere and refine approx 70% of Australia's silver mine production (?)

I've noticed that most coins/rounds on their website have been listed as 'pre-order' for over a month now...but take a look at these dates:

IMG_20211224_221947.jpg


Over 8 Weeks for the Maples and their very own Eureka round. It's anyones guess as to what's going on with that, considering it's their own round which they control the production of.

But that's not all. Look at the silver price vs kitcos spot price. Historically, ABC's spot price has been about 26 cents over the actual spot price. At the time of writing this, it's $1.12.

Screenshot_2021-12-24-22-20-52-53.jpg

The last time we saw such long pre-order wait times was in April/may of 2020. The last time there was such a great divergence in ABC's spot price was JAN/FEB 2021 with the Wall Street Bets and Wall Street Silver fiasco.

I'm inclined to believe the widening of the spot price is because of the Christmas break. They're likely hedging/protecting themselves from any potential spike when the markets re-open, however, it does become a little suspect when the pre-order wait times are also so long.
 
And MERRY CHRISTMAS Guys and Gals!

I really hope you all have a great day and are able to spend some quality time with friends and family. It's great to be part of this forum and I look forward to getting amongst it with you in 2022!
 
I've noticed this too re their own rounds and those they re-sell from other mints. Interestingly some of the coins ABC sell on pre-order have been on BN's sire for sale during same time....so my question....why can BN get stock from O/S mints but not ABC??

I'm not sure it's a shortage of Ag given ABC do have (and usually did) bars from 10z to 5 kgs for sale..not wait.
 
Oddjob said:
I've noticed this too re their own rounds and those they re-sell from other mints. Interestingly some of the coins ABC sell on pre-order have been on BN's sire for sale during same time....so my question....why can BN get stock from O/S mints but not ABC??

I'm not sure it's a shortage of Ag given ABC do have (and usually did) bars from 10z to 5 kgs for sale..not wait.
Click to expand...

I've noticed that, too. It's impossible to understand exactly without insider information, but I would expect ABC has massive buying power in comparison to Billion Now. It may be there are delays with filling such large orders with their suppliers but smaller orders can still get through? If we're talking a 20-30x difference in order volume, it kind of makes sense that some smaller fish could get their feed while delays exist to fill larger orders. Then there's also the potential for logistical challenges associated with larger orders vs smaller orders.

What doesn't add up for me is ABCs own Eureka round having the same long pre-order wait times as the maples. It would be interesting to know if ABC produce their own blanks in-house to make their Eureka rounds...? If they don't, it could well be a supply bottleneck with the blanks, rather than silver itself and/or ABC's lack of production capacity to produce their own product.

From a business perspective, it could be that demand for their cast bars is profitable enough to offset, warrant and justify their Eureka rounds being unavailable - making them a low priority in terms of allocating time for production?

Either way, the fact that other government coins are also on pre-order show there is some type of bottleneck and/or shortage of product. That doesn't mean there is an overall silver shortage but it could mean that we are about to encounter one...

As you'd be aware, each mint has a production capacity, which have been tested throughout the years. It would appear that >200-250 million Oz's of global investment demand begins to stress the production limits of the mints/producers. It reveals that we couldn't accommodate a doubling of overall physical investment demand to 500 Mozs with the current infrastructure in place. No company/entity would view an investment into real-estate, infrastructure and manpower as viable unless they were reasonably certain demand would be maintained for years to come.

What I find interesting is the historical data for physical investment demand over the past 20 years. In 2001, physical investment demand was a meagre 30 Mozs. In 2008, that jumped to 187 Mozs. Since 2010, we've averaged over 200 Moz each year, with 2015 recording a whopping 300Moz+. We can see a few instances throughout the decades where physical investment demand has increased by 5-10x (1978-1980/2008-2011). But what can we manage today? I don't believe the market can accommodate 2x current demand, let alone 5-10x! A 5x In physical investment demand would translate to 1 billion Oz's - the entire global supply of mine production and scrap metal refining each year.

I think we're going to see an increase in participants entering the silver arena, leading to an increase in demand over the next coming years - accompanied and accelerated by inflation - driving up premiums as the mints and major suppliers act as a circuit breaker for the overall market. I think that's what we're beginning to see now with the lengthy pre-order wait times at ABC.
 
I would agree that cast bar production would be easier, faster, and more profitable than coin production and reselling. Further, there may have been covid restrictions on staff these past two years.
 
Over the past few days, ABC's premium over spot has gone from $1.12 to $0.04. that's the lowest I've seen the premium at ABC (their spot price vs actual spot price), as it's usually a consistent $0.26.

Some unusual things happening over at ABC...
 
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