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Supply Demand Facts
Supply and Demand in 2008
DEMAND
 Total global silver fabrication slipped a modest 0.9percent in 2008 to 832.6 Moz. Even though industrial demand dipped slightly by 1.4 percent to 447.2 Million oz, the 2008 performance was the second only to 2007, with most of the loss occurring in the 4th quarter of 2008. Jewelry fabrication dropped by 3.2 percent to 158.3 Million oz. in 2008, the product of weaker off-take in Italy and Thailand. Growth in this sector was most pronounced in India, China and Russia. Silverware demand fell by 2 percent in 2008 to 57.3 Million oz, as losses in western markets were partially offset by gains in India, which witnessed a 7 percent rise, as well as Russia, which also enjoyed growth in consumption last year enjoyed growth in consumption last year.
Supply
Global silver mine production grew by 2.5 percent in 2008, driven by strength in the gold and lead/zinc by-product sectors to 680.9 Million oz, representing the sixth year of consecutive growth and 77 percent of total supply last year (see the Summary Table on page
- Of note, Bolivia’s output more than doubled over 2007’s performance, and Russia experienced a 24 percent gain in mine supply last year. Peru was again the world’s biggest silver mining country in 2008, followed in the rankings by Mexico, China, Australia, and Chile last year, silver generated at primary mines posted a 1 percent decline to account for 28 percent of total mine production. Cash costs at primary silver mines rose to US$4.53 per ounce in 2008, due to inflationary input cost pressures and diminishing base metal by-product credits.
| Top 20 Silver Producing Countries in 2008 (millions of ounces) |
| 1. |
Peru |
118.3 |
| 2. |
Mexico
|
104.2 |
| 3. |
China
|
82.8 |
| 4. |
Australia
|
61.9 |
| 5. |
Chile
|
44.9 |
| 6. |
Poland
|
38.9 |
| 7. |
Russia
|
36.1 |
| 8. |
United States
|
36.0 |
| 9. |
Bolivia
|
35.8 |
| 10. |
Canada
|
21.5 |
| 11. |
Kazakhstan |
20.2 |
| 12. |
Turkey |
10.1 |
| 13. |
Argentina
|
9.9 |
| 14. |
Sweden
|
8.4 |
| 15. |
Indonesia
|
8.0 |
| 16. |
Morocco
|
7.8 |
| 17. |
India
|
7.1 |
| 18. |
Guatemala
|
3.2 |
| 19. |
Iran
|
3.2 |
| 20. |
South Africa |
2.7 |
The net supply of silver from aboveground stocks dropped by a robust 14 percent in 2008 to 151.7 Million oz. The decline was mainly due to lower net government sales and a drop in scrap supply. Scrap volumes fell to an 11 year low of 176.6 Moz. De-hedging reduced the overall producer hedge position by 5.6 Million oz. last year. A further decline in Russian disposals, as well as the absence of any sales from China and India, resulted in a 27 percent fall in government sales in 2008 to 30.9 Million oz.
| Supply from Above-Ground Stocks |
(Million ounces)
|
2007
|
2008 |
| Bullion |
- |
- |
Implied Net Disinvestment
|
-24.7
|
-50.2 |
Net Producer Hedging
|
-23.5
|
-5.6 |
Net Government Sales
|
42.3
|
30.9 |
Sub-total Bullion
|
-5.9
|
-24.9 |
Old Silver Scrap
|
181.9
|
176.6 |
| Total |
176.0 |
151.7 |
World Silver Supply and Demand
To document these and other market fundamentals, each year W&W Metals watches what the "smart money" is doing with their Metals holdings. A leading research company, to prepare and publish an annual report of worldwide silver supply and demand trends, with special emphasis on key markets and regions. It is kid of riding on the coattails of Warren Buffet. This annual survey also includes current information on prices and leasing rates, mine production, investment and fabrication.
To learn more about the general production and uses of silver, please see the Supply and Demand figures below.
World Silver Supply and Demand
(in millions of ounces) |
| |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
| Supply |
| Mine Production |
556.9
|
591.0
|
606.2
|
593.9
|
596.6
|
613.0
|
637.1
|
641.3
|
664.2
|
680.9 |
Net Government Sales
|
90.3 |
60.3 |
63.0 |
59.2 |
88.7 |
61.9 |
65.9 |
78.2 |
42.3 |
30.9 |
Old Silver Scrap
|
181.6 |
180.7 |
182.7 |
187.5 |
184.0 |
183.7 |
186.0 |
188.0 |
181.9 |
176.6 |
Producer Hedging
|
-- |
-- |
18.9 |
-- |
-- |
9.6 |
27.6 |
-- |
-- |
-- |
| Implied Net Disinvestment |
51.7 |
87.1 |
-- |
11.6 |
-- |
-- |
-- |
-- |
-- |
-- |
| Total Supply |
880.4 |
919.1 |
870.9 |
852.2 |
869.3 |
868.2 |
916.7 |
907.5 |
888.4 |
888.4 |
| |
|
|
|
|
|
|
|
|
|
|
| Demand |
|
|
|
|
|
|
|
|
|
|
| Fabrication |
|
|
|
|
|
|
|
|
|
|
| Industrial Applications |
339.0 |
374.2 |
335.2 |
339.1 |
349.7 |
367.1 |
405.1 |
424.5 |
453.5 |
447.2 |
| Photography |
227.9 |
218.3 |
213.1 |
204.3 |
192.9 |
178.8 |
160.3 |
142.4 |
124.8 |
104.8 |
Jewelry
|
159.8 |
170.6 |
174.3 |
168.9 |
179.2 |
174.9 |
173.8 |
166.3 |
163.5 |
158.3 |
Silverware
|
108.6 |
96.4 |
106.1 |
83.5 |
83.9 |
67.3 |
67.8 |
61.2 |
58.8 |
57.3 |
Coins & Medals
|
29.1 |
32.1 |
30.5 |
31.6 |
35.7 |
42.4 |
40.0 |
39.8 |
39.7 |
64.9 |
Total Fabrication
|
864.4 |
891.7 |
859.1 |
827.3 |
841.3 |
830.4 |
847.1 |
834.1 |
840.3 |
832.6 |
Producer De-Hedging
|
16.0 |
27.4 |
-- |
24.8 |
20.9 |
-- |
-- |
6.8 |
23.5 |
5.6 |
Implied Net Investment
|
-- |
-- |
11.7 |
-- |
7.0 |
37.7 |
69.6 |
66.6 |
24.7 |
50.2 |
| Total Demand |
880.4 |
919.1 |
870.9 |
852.2 |
869.3 |
868.2 |
916.7 |
907.5 |
888.4 |
888.4 |
| |
|
|
|
|
|
|
|
|
|
|
Silver Price
(London US$/oz)
|
5.220 |
4.951 |
4.370 |
4.599 |
4.879 |
6.658 |
7.312 |
11.549 |
13.384 |
14.989 |
| SOURCE: World Silver Survey 2009 |
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