The meteoric rise in silver prices has triggered a powerful rally in the global mining sector, with companies in China and India witnessing significant gains in their stock valuations. Investors are flocking to mining shares, capitalising on the precious metal's impressive bull run.
Chinese Miners Lead the Global Rally
In China, a top global silver producer, several mining giants have seen their share prices skyrocket this year. While trading was mixed on Monday as silver prices retreated from a record peak, the year-to-date performance tells a staggering story. Chinese mining stocks have soared by as much as 187% this year.
The standout performers include Hunan Silver Co, Zijin Mining Group Co, Jiangxi Copper Co, Shandong Gold Mining, and CMOC Group. Shares of CMOC Group, which focuses on mining and trading basic and rare metals, surged 6% to a record high in a single session. On a year-to-date (YTD) basis, CMOC has skyrocketed by an incredible 251%.
Individual Performers Shine
Hunan Silver Co, a specialist in silver and its by-products, zoomed 10% in intraday trading and has jumped 115% over the past year. Another major global miner involved in copper, gold, and silver extraction saw its stock dip 2% on Monday but remains 110% higher since the start of the year. Other key players, Shandong Gold Mining and Jiangxi Copper Co, have advanced 66% and 142%, respectively, in the same period.
Asian and Indian Mining Stocks Join the Surge
The rally is not confined to China. Across Asia, mining companies are enjoying a stellar year. Australia's Genesis Minerals Ltd. has surged 199%, while Indonesia's Aneka Tambang Tbk., a gold and silver miner, has advanced 122% in 2024.
In India, the momentum is equally positive. Shares of silver miner Hindustan Zinc have climbed 38% this year, reflecting the broader regional trend driven by booming metal prices.
What's Fueling the Silver Boom?
Silver prices touched a historic high of $84 per ounce on Monday before experiencing sharp volatility and a retreat of nearly 5%. However, the metal's overall trajectory remains strongly bullish, with a year-to-date gain of approximately 180%. Analysts attribute this surge to a combination of a weaker US dollar, rising geopolitical tensions, heightened speculative trading, and a fundamental supply-demand imbalance.
A key structural driver is the growing demand from the technology sector. "Silver is a key component needed for data centres and AI, and the market is waking up to that demand," noted Kazuhiro Sasaki, head of research at Phillip Securities Japan Ltd. He added that many investors are now shifting funds from overvalued chip and AI stocks to metals like silver, which appear more undervalued in comparison.
The sharp increase in metal prices, particularly silver, is projected to significantly boost realisations and revenues for mining companies worldwide, setting the stage for continued investor interest in the sector.
