Demand Up! Supplies Down!
Today, we glean some information from the new World Silver Survey 2019. The annual report, released this month, is produced by The Silver Institute, a trade association.
The Survey notes several significant silver supply/demand developments last year.
Total silver demand rose 4 percent to 1.0335 billion ounces in 2018. This was the first annual increase in total demand since 2015. Although the report found a small decline in silver demand for industrial applications, it was offset by “a robust recovery in retail investment, led principally by silver bar demand, which climbed sharply last year.” In fact, the coin and bar market jumped 20 percent last year. Demand also benefited by increases in jewelry and silverware demand.
Global mine production of silver had climbed for 13 straight years before 2016. Now it has fallen for three years in a row. 2018 saw mine production fall 2 percent over the prior year, to 855.7 million ounces.
Silver recovered from prior usage, scrap production, has always been vital to filling the gap between silver production and demand. Scrap supply has been falling every year since 2012. In 2018, scrap supply fell 1.6 percent over the prior year to 151.3 million ounces.
Altogether, including marginal adjustment to the supply and demand figures given here, the Survey reports that there was a physical silver deficit of 29.2 million ounces. The shortfall must be made up by above-ground stocks of silver. In 2018, after nine years of growing above-ground silver inventories, those stocks fell by 3 percent to 2,457.5 million ounces.
The Results Indicate Silver is Bullish
In summation, the silver picture is bullish indeed. Silver demand grew in 2018, while production fell. Scrap silver recovery continues to decline, while above-ground stockpiles fell as well.
The complete World Silver Survey 2019 report can be accessed online at The Silver Institute site HERE.
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