Global Silver Demand in 2021

In 2021, the global silver market experienced simultaneous growth in all key demand categories for the first time since 1997. Total global demand for silver rose 19 percent to 1.05 billion ounces (Boz) last year, surpassing pre-pandemic levels. Silver's use in industrial applications reached an all-time high of 508.2 million ounces (Moz), an increase of 9%.

As retail bullion investors in North America and Europe, motivated by safe-haven and inflationary concerns, took advantage of periodically lower silver prices to purchase coins and bars, physical silver investment (sales of silver bars and coins) surged by 36% to 278.7 Moz, its highest level since 2015.

It is important to note that the silver market experienced its greatest shortage since 2010 last year, with 51.8 Moz, its first deficit since 2015.

The Silver Institute's World Silver Survey 2022, which was released today, discusses these and other significant aspects of the global silver market. The Survey provides insights and an outlook for 2022 in addition to examining the primary influences on the silver market in 2021.

Metals Focus, a London-based independent precious metals consultancy, conducted research and produced the Survey for the Silver Institute.

Silver Demand All categories of demand increased last year, reaching 1.05 Boz annually, an impressive 19 percent increase over 2020. Despite difficulties with global logistics, industrial fabrication increased by 9% to 508.2 Moz. This increase reflected the effects of a resumption of industrial operations and the reopening of businesses as economies began to recover from COVID. The demands of the home working economy, strong demand for consumer electronics, investments in 5G infrastructure, inventory buildup along the supply pipeline, and rising silver consumption in the green economy, particularly in photovoltaics, were additional supportive factors. Due primarily to the favorable perception of silver price, substitution and thrifting exerted little pressure.

As global solar installations increased, silver's use in photovoltaics increased by 13% to 113.7 Moz, and overall demand for electronic and electrical goods increased by 9% to 330 Moz. Silver's use in aerospace and defense also increased last year. alloys and brazing accounted for 47.7 Moz, a 6% increase over 2020.

Contrary to the long-term trend of declining use, silver's use in photography increased by 3% in 2021 to 28.7 Moz.

Last year, a portion of the demand recovery came from the medical industry, which struggled to clear the backlog of delayed x-rays caused by COVID's overwhelming impact on hospitals.

In 2021, the production of silver jewelry increased by 21% to 181.4 Moz. Fabricators also benefited from replenishing stocks, which had decreased in 2020, in addition to rising consumption. With a 45 percent increase to 58.7 Moz, India paved the way for the demand for silver jewelry. Thailand followed with 24.8 Moz, followed by Italy with 20.4 Moz and the United States with 13.2 Moz. After a somewhat disappointing 2020, demand for silverware increased by 32% in 2021 to 42.7 Moz. With 24.4 Moz, India dominated the world's silverware harvest, followed by Nepal with 4.8 Moz and China with 2.7 Moz.

Physical silver investments increased by 36% to 278.7 Moz, the highest level since 2015. Silver Investment and Price Retail investors in North America and Europe took advantage of lower prices to purchase silver bars and coins against a backdrop of uncertain economic growth, rising inflationary concerns, and persistently negative real rates . Sales of silver coins and bars more than tripled in India during the second half of the previous year.

Net annual inflows into silver-backed exchange-traded products (ETPs) continued in 2021. The total number of ETP holdings increased by 65 Moz to a new record high of 1.13 Boz. Early in 2021, gains were concentrated and benefited from the focus on silver on social media. Importantly, the institutional investment market was characterized by little evidence of liquidations toward the end of 2021.

The average silver price in 2021 was US$25.14, a 22% increase over 2021. The annual average price of silver has increased by 47% since 2017.

Silver Supply In 2021, global mined silver production increased by 5.3% to 822.6 Moz. The recovery in output following a disruption caused by COVID-19 in 2020 was the driving force behind this increase, which was the most significant annual increase in mined silver supply since 2013. World silver supply and demand (million ounces) 2020-2021 Supply Mine Production 781.1 822.6 Recycling 162.2 173.0 Net Hedging Supply 8.5 - Net Official Sector Sales 1.2 1.5 Total Supply 953.0 997.2 Demand Industrial 464.9 508.2...of which Photovoltaics 101.0 113.7 Photography 27.8 28.7 Jewelry 149.8 181.4 Silverware 32.4 42.7 Net Physical Investment 205.0 278.7 Net Hedging Demand - 9.4 Total Demand 880.0Metals Focus saw an increase of 10.2% due to its concentration in nations where COVID restrictions in 2020 had a significant impact on mining. Gold price and lead-zinc mine silver output increased by respectively, as a result of the pandemic's disruption recovery. In 2021, Mexico produced the most silver, followed by China, Peru, Australia, and Poland.

Global silver recycling reached an eight-year high of 173 Moz in 2021, driven by an increase in industrial scrap supply.

For the second year in a row, total cash costs (TCC) and all-in-sustaining costs (AISC) decreased in primary silver mining.TCC decreased to US$3.88, a decrease of 18% over 2021, and AISC decreased to US$10.88, a decrease of 3% over the previous year.  

Outlook for 2022 Precious metals forecasting faces challenges this year due to geopolitical and economic factors such as the Russian invasion of Ukraine, inflation that has been at an all-time high, lower global growth projections, and rising interest rates. Metals Focus, on the other hand, projects a 5% increase in global demand for silver as a result of further structural advancements in industrial fabrication, which are anticipated to reach a new record high in 2022.

This year, demand for silverware and jewelry should continue to recover from the pandemic. On the supply side, project ramp-ups and gains in established mine output, in addition to an increase in industrial recycling, are anticipated to drive a 3% increase in global supply in 2022.

This year, physical silver investment is likely to be flat, as further gains in India will offset a slight decline in western investment. It is anticipated that investment in ETPs will rise by 25 Moz for the fourth year in a row. It is anticipated that the annual average silver price will reach US$23.90, which would be the second-highest annual average since 2011.

About the World Silver Survey and Ordering Information Since 1990, the Silver Institute has published this annual report on the global silver market to provide participants in the market and the general public with accurate supply and demand statistics. Metals Focus conducted independent research and produced this 32nd edition of the World Silver Survey.23 businesses and organizations from Asia, Europe, and North and South America funded the report.

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