With the margins in the PM industry over all, being in the supply chain for blanks would be like playing corporate Russian roulette. The margins dictate "Just in Time" delivery but no one in the chain have the fat to cope holding more silver than they need, hence it is my view looking from the outside, they is a lot of inefficiencies.
If possible PM industry is worse than the perennial low margin Personal computer industry, who at least know the prices will be good for 1/2 year before prices started to drop.
However with PM, technically a cog in the chain could go broke with simple bad timing, imagine buying at spot today as a blank manufacturer to deliver to mint next month millions of blanks but during the time spot goes down 20%. Potentially wiping out any profit before they even on-sold it.
Someone reported that it is crazy/criminal for US mint to be buying its blanks and to have shortage of blanks is inexcusable and heads should roll.
But in my way of thinking this, is US Mint performing good corporate governance because they wont be the poor sap who have increased production to millions a week, with new facilities and wages for employees costing tens or even hundred millions.
In 2015 ASE averaged over 4million minted every month, some months US Mint ran out of blanks so could not keep up with demand.
In 2016 Jan 5.8million sold, Feb to May 2016 sold about 4million a month. But in June, July and August sales slowed to June 2.8m, July 1.3m and likely to be a million in August.
So chances are US mint will order less blanks to manage the stockpile, I bet someone in downstream supply chain and is praying its not them. And buying less hoping to pass the grenade further down the chain. Becuase it will be like WTF when US Mint decreases its order to minimise the mountain of blanks stockpiled.
If the blank manufacturer ordered 12million ounce of silver for manufacturing for 3 months supply and US mint order 1m blank a months for three months. As the saying goes "someone just got done for"
