WASHINGTON, DC, November 17, 2021 (GLOBE NEWSWIRE) – Every key area of silver demand is expected to increase in 2021, including a record total for industrial demand, despite current supply chain challenges, reported Philip Newman, Managing Director of Metals Focus, and Adam Webb, Director of Mine Supply, during the Silver Institute’s Interim Webcast on the Silver Market Today, which featured historical statistics and estimates from the supply and demand for 2021. Here are the main highlights of the presentation:
- With each major component of silver demand set to increase in 2021, global silver demand is expected to reach 1.29 billion ounces, the first time it has exceeded 1 billion ounces since 2015.
- The recovery in industrial demand for silver following the pandemic will allow this segment to reach a new high of 524 million ounces (Moz). In terms of some key segments, we estimate PV demand will increase by 13% to over 110 Moz, a new high and highlighting the key role of money in the green economy. This will also support much of the expected 10% gain in electric / electronic levies. Finally, the demand for brazing and soldering alloys is expected to improve by 10% in 2021, helped by a recovery in housing and construction, although it remains below pre-pandemic levels.
- Physical investment in 2021 is set to increase 32%, or 64 Moz, year over year to a six-year high of 263 Moz. The force will be pulled by the United States and India. Building on the strong gains of last year, demand for coins and bullion in the United States is expected to exceed 100 Moz for the first time since 2015. Growth started with the social media buying frenzy ahead of expand to more traditional silver investors. Indian demand reflects an improvement in sentiment towards the price of silver and an economic recovery. Overall, physical investment in India is expected to nearly triple this year, after collapsing in 2020.
- Exchange traded products are expected to see total holdings increase by 150 Moz this year. As a result, the combined holdings will have increased by 564 Moz over the past three years. In 2021 and through November 10, holdings increased by 83 Moz, bringing the global total to 1.15 billion ounces, close to its record of 1.21 billion ounces reached on February 2, at the peak of from the social media storm.
- This year, the price of silver has built on its 2020 gains and has continued to strengthen. Until November 10, prices rose 28% year-on-year. This follows a 27% rise in the annual average price in 2020. The rise reflects inflows of healthy investors into silver, amid favorable macroeconomic conditions, including persistently low interest rates, concerns about uncontrolled fiscal expansion and, more recently, growing concerns about mounting inflationary pressures. The gold / silver ratio fell to 62 in early February, its lowest since July 2014. However, since then it has risen to around 74 in early November. Even so, it still compares favorably to last year, where the ratio was 89 on average. In terms of full year price averages, Metals Focus expects silver to increase 24% year-on-year to $ 25.40. This would achieve the highest annual average since 2012, $ 31.15.
- In 2021, mined silver production is expected to increase 6% year-on-year to 829 Moz. This recovery is largely the result of the fact that most mines were able to operate at full capacity throughout the year following forced shutdowns in 2020 due to the pandemic. Countries where production was hit hardest last year, such as Peru, Mexico and Bolivia, will see the biggest increases. Meanwhile, the high prices of silver and metal by-products this year have improved the profitability of the silver mining industry despite rising input costs. Average industry margins are currently at their highest level since 2012, and only 5% of the world’s primary silver mines were operating at costs above the price of silver in the first half of the year.
- Silver jewelry and silverware manufacturing is expected to partially recover from depressed 2020 totals, increasing 18% and 25% respectively, to 173 Moz and 40 Moz. Both markets will benefit from a strong recovery in all key countries, particularly India, as the economy and consumer confidence rebounded faster than expected and restrictions ended in time for the all-important season weddings and parties.
- Overall, the silver market is expected to register a physical deficit in 2021, albeit modestly. At 7 Moz, this will be the first deficit since 2015.
|Money supply and demand||From year to year|
|Net cover offer||5||4||2||1||1||1||1||1||1||1||1||18%||-17%|
|Official sector net sales||12||–||–||11||2||–||–||–||15||8||–||n / A||n / A|
|Net Physical Investment||273||241||301||283||310||211||154||163||183||199||263||9%||32%|
|Net demand for coverage||–||40||29||–||–||12||2||8||–||–||–||n / A||n / A|
|Market equilibrium||-34||31||-30||46||-2||71||68||32||30||80||-7||165%||n / A|
|Net investment in FTEs||-18||53||5||-0.3||-17||54||7||-21||83||331||150||298%||-55%|
|Market balance minus FTEs||-15||-22||-35||111||81||85||129||53||-53||-251||-157||373 %||-38%|
|Silver price (US $ / oz, London price)||35.12||31.15||23.79||19.08||15.68||17.14||17.05||15.71||16.21||20.55||25.40||27%||24%|
|Source: Focus on metals|
Disclaimer and copyright. The Silver Institute and Metals Focus
We (and, where applicable, any identified contributors or co-authors) are the owner or licensee of all intellectual property rights in this material. This document is protected by copyright laws and treaties around the world. All rights reserved.
No organization or individual is authorized to reproduce or transmit all or part of this document (including, without limitation, extracts such as tables and charts), whether by photocopying or storing in any medium by electronic means. or otherwise, without the written permission of The Silver Institute and Focus Metals. In cases where we have provided our document electronically, only the authorized subscriber, for whom an individual use license has been granted, may download a copy of this document. Additional user licenses can be purchased on request.
Although every effort has been made to ensure the accuracy of the information contained in this document, the content of this document is provided without any warranties, conditions or guarantees as to its accuracy, completeness or reliability. It should not be construed as a solicitation or an offer to buy or sell precious metals, related products, commodities, securities or related financial instruments.
The silver institute
Email: [email protected]
Focus on metals
Email: [email protected]