2015 Silver Market Review Summary

2015 Silver Market Review Summary

GFMS Thomson Reuters just released its interim silver market review for 2015 and we summarise the findings:

• Total silver supply forecast to fall 1.01b oz, down 3% on 2014.
• Mine production (at 867m oz) flat, scrap return down 5% and dehedging down 12.6m oz
• Increases in primary production from Mexico offset by falls in base metal by product
• Silver bullion coin sales reached a new record high in Q2 at 32.9m (up 95% YonY).  Demand lead shortages experienced amongst most world mints.  2015 total now forecast at all time record of 129.9m oz. up 21% and accounting for 12% of all physical demand.  (Note the report does not cover bar demand)
• Industrial demand is forecast at 570.7m oz, 54% of total silver demand and down 4% on 2014
• Solar (PV) demand is to increase 17% to 74.2m oz, fractionally below the 2011 record of 75.8m, and accounting for 13% of industrial demand.
• Ethylene Oxide use is up 49% to 8m oz, the highest since 2010
• Electronics demand dropped 12.9m oz, a trend since 2011 and exacerbated by weakness in China and miniaturisation of devices.
• Jewellery fabrication demand is forecast at 218.9m oz, down 2.5% on last year driven almost entirely by a big drop in China, with most other countries increasing.
• All up, the silver market is expected to be in an annual deficit of 42.7m oz in 2015.  That makes it the third consecutive year of demand outstripping supply.

Economics 101 Supply & Demand should dictate these low prices can’t last much longer…