Key Components of Global Silver Demand Rose in 2014

Global silver jewelry demand posted a record high last year, and silverware offtake rose to its highest level since 2006, according to the World Silver Survey 2015, released this May by the Silver Institute. Silver increased its popularity in the jewelry and silverware markets as fashions continued to target bigger and heavier pieces. The trend away from plated material towards sterling silver also continued, the survey stated.

Globally, silver jewelry fabrication had a second consecutive year of growth, increasing 1.5 percent. This was a reflection of high levels of restocking and a strong performance from India, which surged 47 percent from 2013 levels. Gains were also noted in Europe, up 9.3 percent, and North America, up 2.2 percent. Total silverware fabrication rose 3 percent, primarily due to a 20 percent increase in demand from the Indian Subcontinent.

Total physical silver demand was 1.07 billion ounces in 2014. This was the fourth highest level recorded since 1990, but a 4 percent decline from 2013 levels largely due to a fall in coin and bar demand from  2013, which had been a record year. Industrial applications accounted for 56 percent of all silver demand in 2014. On a regional basis, a modest increase in industrial demand in developing countries, led by 4 percent growth in China and Taiwan, was offset by weaker demand in advanced countries in 2014. This marks the fifth consecutive year of Chinese industrial demand growth. Last year’s industrial demand total for Taiwan was 23 percent above their 2009 figure.

Last year also saw notable growth in key silver industrial end uses, including ethylene oxide, hotovoltaics, and brazing and alloys. About 128.6 million ounces of silver resided in global ethylene oxide plants, which was equivalent to 15 percent of last year’s total mine production. “Silver consumed in ethylene oxide (EO) production was up 6 percent year-on-year. Much of this was due to gains in China, the largest source of silver demand in the EO industry, adding 4.4 million ounces to its production capacity thanks to newly-commissioned plants,” the survey stated. “Industrial demand held broadly flat over the year with notable increases from the photovoltaic sector (the first in three years) and the brazing alloys sector.” Brazing alloy and soldering demand increased by 3 million ounces in 2014.

This increase was offset by modest declines in the electronics and photographic sectors, and overall industrial fabrication was 594.9 million ounces, the survey stated. Silver demand for photovoltaic applications rose. “Photovoltaic (PV) demand for silver totaled 59.9 million ounces in 2014, up 7 percent from the previous year,” the survey noted. “This was the first increase in two years and was driven by a combination of less aggressive thrifting of silver content per solar cell and an 11 percent rise in solar panel installations.”

In 2014, silver coin and bar purchases remained at historically high levels, mainly due to growth in silver coin demand in several key markets. Growth was seen in the United States, Canada, India and Spain. Silver coins and medals demand was 107.6 million ounces last year. Holdings by silver-backed exchange traded funds remained sturdy, growing by 1.4 million to record their highest year-end level at 636 million ounces.

Silver mine production grew by 5.0 percent to 877.5 million ounces, mainly the result of stronger output from the primary silver and copper sectors, new projects that came online last year, and significant production gains in Central and South America, the survey reported. Mexico was the world’s leading silver producer, followed by Peru, China, Australia and Chile.

Government sales of silver were essentially nonexistent last year. Scrap supply was down 13 percent, the lowest volume level recorded since 1996 and the third consecutive year of decline. As a proportion of total silver supply, scrap remained just above 15 percent, down from 25 percent in 2011 and 2012.

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Courtesy of www.silverinstitute.org