Gist of Silver Institute Report

Here is the gist of Silver Institute Report available in both English and Hindi .


  • The silver market experienced a large deficit in 2022 due to strong physical demand and limited supply gains, but the average price of silver fell due to pressure from bearish institutional investors.
  • Global mine production of silver fell marginally by 0.6% in 2022, with Peru suffering the greatest decline in output due to various factors.
  • Recycling activity rose for a third year in a row, with industrial scrap being the primary contributor to the increased supply.
  • Total silver demand saw a notable jump in 2022, with off take growing by 18% to the highest level in the series going back to 2010, driven largely by industrial and physical investment demand.
  • Industrial demand for silver increased by 8% in 2022, mainly due to growth in the automotive, 5G network, and construction industries.


  • Photographic demand for silver continued its structural decline in 2022, falling to 27.5Moz.
  • Silver jewelry fabrication and silverware demand saw strong growth in 2022, primarily driven by demand from India.
  • Physical investment in silver rose for a fifth straight year to a new high of 332.9Moz in 2022, with India emerging as the top performer.
  • The authors predict another significant deficit for silver in 2023, but expect institutional investment to decline and the price to fall before the end of the year.
  • The low-interest-rate environment, successive QE programs, and unprecedented fiscal stimulus have made systemic tail risks fatter, and markets have become addicted to stimulus.
  • Metals Focus expects the silver price will come under pressure in the second half of the year, reflecting three key assumptions. The first assumption is that there will be no cuts in US policy rates this year. The second assumption is that continued interventions by authorities tend to perpetuate growing systemic risks. The third assumption is that equity prices are due to a sizable correction to reflect the reality of earnings projections.


  • Metals Focus forecasts see the silver price move broadly sideways over the next few months, before suffering liquidations in the second half of the year. By Q4, they expect the price will trade in the low $18s, resulting in a full-year average of $21.30, 2% lower y/y.
  • Metals Focus expects 2023 will see another large deficit for silver, amounting to 142.1Moz (4,419t). In 2023, they expect industrial fabrication will reach another all-time high, boosted by continued gains in photovoltaic (PV) applications as well as healthy off take from other industrial segments. Bar & coin demand and jewelry fabrication are expected to fall short of last year’s exceptional levels, but the former remains historically high (up 33% on the 2010-19 average) while the latter holds firm (up 7% versus 2010-19). Supply, by contrast, is expected to achieve only small single-digit gains.
  • Silver investment was mixed in 2022, with institutional investment being mixed, while sales of silver bars and coins registered a fifth consecutive year of growth.
  • Geopolitical concerns following the start of the Russia-Ukraine war and inflationary pressures fueled by soaring commodity prices were key drivers of the silver price in 2022.
  • Aggressive rate hikes by the Fed raised the cost of holding precious metals for institutional investors, leading to underperformance by silver as a precious and industrial commodity.
  • Headwinds for silver are expected to emerge later in 2023 due to rising real rates, which will raise the opportunity cost of holding non-yielding precious metals.


  • Physical investment in silver in the form of bars and coins jumped by 22% y/y in 2022 to a new high of 332.9Moz, with US silver coin and bar demand setting a new high.
  • Despite the high levels of silver buying, there has been little selling back of silver bars and coins by US retail investors.
  • Strong positive interest emerged in late Q1 of 2023 as the banking crisis unfolded, leading to a surge in precious metals prices, including silver.
  • Global silver mine production fell slightly in 2022, by 0.6% year-on-year to 822.4 million ounces, due to delayed projects and unexpected disruptions.
  • The drop in silver production in 2022 was driven by lower by-product output from lead/zinc mines.
  • Peruvian output fell the most in 2022, followed by Australia and Bolivia, while Mexico, Argentina, and Russia saw rising output.
  • Mined silver supply is expected to rise by 2.4% year-on-year in 2023 to 842.1 million ounces, driven by new projects.


  • Inflation in key input costs in 2022 drove primary silver miners’ all-in sustaining costs up by 15.8% year-on-year.
  • North American silver mine production rose by 1.1% year-on-year to 240.2 million ounces, with higher production in Mexico offsetting reduced output from the US and Canada.

The key points from the data are:

  • The majority of silver is produced as a by-product of mining other metals, such as lead/zinc, copper, and gold.
  • Lead/zinc mines are the biggest contributor to global mined silver supply, with China being the biggest producer of both metals. However, output from China has been declining due to reserve depletion and environmental regulations.
  • By-product silver production from copper mines increased in 2022, driven by a rise in copper production.
  • Gold mines also produced a significant amount of silver in 2022, with Chinese output increasing and Russian output declining.
  • By-product silver production is expected to remain almost flat in 2023, with higher silver output from gold mines partially offsetting lower output from lead/zinc mines.
  • The production of silver as a by-product of mining other metals is influenced by various factors, such as changes in the production of the primary metals, reserve depletion, environmental regulations, and social unrest.
  • In summary, the crux points are the dominance of by-product silver production, the declining output from lead/zinc mines in China, the increase in by-product silver production from copper mines, and the expected almost flat production of by-product silver in 2023 due to the offsetting factors of higher silver output from gold mines and lower output from lead/zinc mines.


  • The global reserves at primary silver mines and projects have dropped by 5.2% year-over-year due to mining depletion exceeding additions from resource upgrades, while total identified resources excluding reserves have only modestly dropped by 0.6% year-over-year as the conversion of resources into reserves surpassed additions of newly discovered resources. The value of merger and acquisition activity in the primary silver sector increased in 2022 to a four-year high of $82m, with the biggest silver mining deal being Endeavour Silver’s $70m acquisition of the Pitarrilla project. Net de-hedging continued in 2022, with the global delta-adjusted hedge book having outstanding hedges for 18.6Moz, a fall of 49% year-over-year and the lowest point since 2018.


  • Indian silver bullion imports surged by 244% to 306.6Moz (9,535t) in 2022, underpinned by a jump in demand and restocking of a depleted supply chain, leading to a record level of UK bullion exports and a drop in London vault holdings.
  • UK bullion exports achieved a record high of 363.4Moz (11,302t) in 2022, with the bulk of the upside due to a surge in shipments to India delivered by air cargo.
  • US silver imports fell by 9% to an estimated 239.0Moz (7,434t) in 2022, but remained historically high, reflecting the overall strength of US physical investment and industrial demand.
  • Turkish physical investment imports of silver jumped by 162% to 28.3Moz (880t) in 2022, while deliveries of Good Delivery Bars from South Korea and Kazakhstan almost doubled compared to 2021.
  • Middle East bullion exports rose by 140% in 2022 to 32.2Moz (1,001t), with Turkey becoming the eighth largest importer of silver bullion in 2022.
  • Industrial silver demand rose by 5.4% to 556.5Moz (17,309t) in 2022, a new record high, driven partly by gains from green economy applications, improvements in photovoltaics, and investment in power generation and distribution.
  • Industrial demand growth of 4% is forecasted for this year, with end-uses in the green economy as a key driving force. However, recent wobbles in the banking industry may bring uncertainty to the first half, and inventory adjustments may delay the recovery of consumer electronics demand until the second half of the year.
  • Offtake in Europe fell by a notable 6% in 2022 to 85.9Moz (2,671t), exclusively driven by losses in Germany and the UK, while all other countries in the region saw gains. Growth is forecast for most countries this year as the region looks likely to avoid recession and through further investment in green technologies.
  • Industrial demand in North America rose by a robust 6% in 2022 to an 11-year high of 132.9Moz (4,133t), with all sectors growing, with the greatest gains being for other industrial offtake due to a strong year for EO catalysts.
  • Logistics challenges and silver prices never achieved a level that triggered thrifting and/or substitution of any scale, and automotive end-use was boosted by the ongoing rise in vehicle sophistication, such as onboard diagnostics to transmit real-time emission levels as legislation tightens.
  • Silver jewelry demand increased by 29% in 2022, with India being the major contributor to the surge.
  • Excluding India, there was a slight dip in silver jewelry volumes in 2022.
  • Notable gains in silver jewelry demand were seen in Italy, Thailand, Indonesia, and Turkey due to post-pandemic recovery in exports and/or local sales.
  • The US, Russia, and China experienced notable declines in silver jewelry demand in 2022.
  • Global demand for silver jewelry is expected to fall by 15% in 2023 due to lower offtake in India.
  • European jewelry fabrication rose by 3% in 2022, reaching a 12-year high, mostly due to a rise in local consumption and restocking by retailers.
  • Italy, the dominant player in jewelry exports, saw a 6% decline in jewelry exports in 2022.
  • The official export data may not reflect the actual situation as it can be misleading, and there is a possibility that unofficial shipments occurred.
  • The European jewelry industry is expected to remain steady in 2023, with a possibility of a slight increase in offtake.
  • The data is divided into two parts: Europe and North America.
  • In Europe, the feedback on jewelry consumption shows modest growth, with the start of a swing in expenditure from goods to services being blunted by sizable inbound tourism. However, there are clear signs that the value of sales outperformed the fine weight, as branded goods and the top-end saw the best results. In France, official turnover data points to 20% growth for the whole jewelry (and watch) market, but strength for the luxury brands means that figure has almost no relevance for silver. Consumption in Europe this year is expected to see first half weakness due to the cost of living crisis, making a slight dip for the full year likely.
  • In North America, US silver jewelry fabrication fell by 3% in 2022, but that was almost all due to a strong 2021 performance when demand shot up by 15%. The fact that consumption eased was due to several factors, including a shift from goods to services, the fading novelty of in-store purchases, the end to Federal stimulus checks, and a fashion swing to the yellow look. However, silver jewelry consumption held up due to the solid jobs market, high savings, and recession being avoided. The value of sales also held up as branded and higher price point jewelry outperformed.
  • Heavy re-stocking in 2021 boosted demand that year, and further stock growth took place in 2022.
  • Retailers had high inventories in mid-2022, but consumption strength in the all-important holiday season limited overstocking by year-end.
  • Local production was not displaced by imports as these fell overall, with imports from Thailand growing by over 10%, whereas shipments from India, China, and Italy all fell notably.
  • Jewelry demand in the Middle East increased by 7% in 2022, with Turkey, the largest fabricator, seeing a rise of 5%, driven by record exports, and local sales improving by 14%.
  • India, the world’s largest fabricator, achieved a record high in 2022, with fabrication nearly doubling year-on-year, around 60% higher than 2019 levels and 80% higher than the five-year average.
  • Aggressive re-stocking by traders and retailers, along with the growth of organized gold retailers, aided India’s fabrication surge.


  • Global silverware demand in 2022 reached a record high of 73.5Moz (2,286t), due mainly to India’s increased demand.
  • Indian silverware fabrication rose by an impressive 120% to a record 53.6Moz (1,667t) in 2022, driven by a robust economy, removal of restrictions, and lower silver prices.
  • Global silverware demand is expected to fall by 30% to 37.5Moz (1,167t) in 2023, due to waning pent-up demand and normalizing trade stocking.
  • Chinese demand for silverware fell by 15% in 2022, despite online sales improvements, due to the severe impact of tight pandemic measures and impaired consumer sentiment.
  • Middle Eastern silverware offtake rose by 9% in 2022, due to a notable rise in Turkish exports of 18%, with much of it bound for Israel and the US.
  • European demand for silverware was flat y/y, with gains in custom-made, religious, and branded items balancing out losses in the mass market.
  • US demand for silverware even rose modestly last year as postponed purchases fed through to higher consumption.

Content source: Silver Institute