India’s massive silver demand cutting world’s warehouse stocks

By Swansy Afonso and Sing Yee Ong

2022.11.07

Indian silver consumption is forecast to surge by around 80% to a record this year, as traders draw down inventories in warehouses from London to Hong Kong after two Covid-riddled years.

Indians bought historically low amounts of silver in 2020 and 2021 as supply chains and demand were hit by virus outbreaks. While consumers rushed to jewelry stores to buy gold in last year’s final quarter when pandemic restrictions eased, pushing sales to an all-time high, silver demand grew by less than 25%.

This year, silver sales are back on track. Local purchases may surpass 8,000 tons in 2022 from about 4,500 tons last year, said Chirag Sheth, principal consultant at Metals Focus Ltd. That’s up from an April estimate of 5,900 tons.

“We are seeing a jump in purchases among retail customers, similar to what we saw in gold last year, because of pent-up demand,” Sheth said.

Imports during the January to August period were 6,370 tons compared to just 153.4 tons during the year-before period, according to the latest data from the nation’s trade ministry. For 2021, the country shipped in only 2,803.4 tons.