Global Silver Market Faces Fourth Consecutive Year of Deficit
The global silver market is expected to be in deficit for the fourth consecutive year, according to a report by the Silver Institute in collaboration with consulting firm Metals Focus. In 2024, worldwide silver consumption is projected to rise by approximately 1% year-on-year, reaching 1.21 billion ounces (about 37,500 tonnes). However, despite the overall increase in consumption, investment demand is expected to decline by 15% to 208 million ounces, largely due to a prolonged downturn in Europe and a 40% decrease in purchases of silver coins and bars in the United States. Meanwhile, other areas of silver consumption are set to grow.
Industrial demand for silver is forecast to increase by 7% this year, surpassing the 700 million ounce mark for the first time. The rising demand for silver is driven mainly by the solar energy and electronics sectors, particularly due to increased construction of data centers. Demand for jewellery and other silver products is also expected to grow by 5% this year, with India being the largest contributor to this growth. Additionally, demand for silver jewellery has significantly increased in the United States.
Global silver production in 2024 is projected to grow by about 1% compared to 2023, reaching 837 million ounces. Production in Mexico, the world's largest silver producer, will rise by approximately 10 million ounces, to 209 million ounces. Growth in silver production is also expected in Chile and the United States, although this will be partially offset by lower output in Peru, Argentina, and China.
The balance of the silver market will be supported by recycled silver, which is expected to increase by 5% year-on-year, reaching more than 190 million ounces, the highest level in 12 years. The growth in recycled silver is being driven by a rise in silver prices, which have reached their highest level since 2012. Since the beginning of the year, silver prices have increased by more than 30%, consistently staying above $30 per troy ounce since September.
As a result of these dynamics, the global silver market is projected to face a deficit of 182 million ounces in 2024, only 4% lower than the deficit recorded last year. Metals Focus suggests that this deficit ratio will remain largely unchanged in the coming years.
