Silver heads for biggest deficit in decades, Silver Institute says

By Peter Hobson

2022.11.18

Global demand for silver is expected to rise 16% this year to 1.21 billion ounces, creating the biggest deficit in decades, according to the Silver Institute on Thursday night.

Use of silver by industry, for jewellery and silverware and for bars and coins for retail investors were all forecast to reach record levels, the institute said.

Automakers are using more silver as the amount of electronics in vehicles increases, but the sector accounts for only around 5% of total demand. Solar panels account for around 10% of silver demand.

Demand in India almost doubled in 2022 as buyers took advantage of low prices to replenish stockpiles drawn down in 2020 and 2021.

Exchange traded funds (ETFs) storing silver for investors shrank, however, returning metal to the market, but the Silver Institute does not count ETFs as physical demand because they only store wholesale silver bars and do not rework them.

The Silver Institute predicted a deficit of 194 million ounces this year, up from 48 million ounces in 2021.

Demand is likely to fall next year, said Philip Newman at consultants Metals Focus, which prepared the Silver Institute’s numbers.