Silver deficit plummets 95 percent

The rise in silver mining and a slowdown in consumption in the Chinese economy led to a sharp drop in the silver deficit in 2014. The market deficit narrowed to just 4.9 Moz in 2014, compared to a deficit of 111.9 Moz in 2013, according to a report compiled by the GFMS for the Silver Institute.

Falling prices and increased demand in India pushed consumption to a record high of 215.2 million ounces per year. Indian demand for silver jewelry rose 47 percent to 62.2 Moz. Usage successes have also been reported in Europe and North America. Manufacturing demand for silver in these regions increased by 9.3 percent and for jewelry by 2.2 percent. Global demand for silver increased for the second consecutive year, up 1.5 percent from the previous year. Silver consumption rose to its highest level since 2006.

The demand for silver coins and bars reached new highs in 2014 at 107.6 million ounces per year. Strong demand for coins was reported in key markets such as the US, Canada, India and Spain. High demand for silver bars was noted in India. On the other hand, the demand for bullion fell in the USA, China and Europe.

At the same time, the supply of silver scrap has been declining for the third year in a row. Scrap shipments fell 13 percent in 2014 to 168.8 Moz, the lowest level since 1996. The share of silver scrap shipments fell to 15 percent from 25 percent in 2011 and 2012.