Global silver demand posts record high of 1.2B oz in 2022

All major silver demand categories achieved record highs in 2022, pushing total demand to a new high of 1.2 billion oz. last year, according to the Silver Institute. In its World Silver Survey 2023, it reported that since 2020, global silver demand has increased by 38% as world economies recovered from the Covid-19 pandemic. 

Industrial silver demand was up 5% last year over 2021, while demand for physical silver investment grew by 22%. Demand for silver in jewelry and silverware rose by 29% and 80%, respectively. 

With record silver demand came lower mine production, totalling 822.4 million oz. globally. At 228.2 million oz., output from primary silver mines rose only 0.1% in 2022 compared to 2021. The flat performance resulted from lower byproduct output from lead-zinc mines, especially in China and Peru. The bright spots were Mexican production (up by 3.1 million oz.), Argentina (3 million oz.), and Russia (2.2 million oz.). 

Recycling activity rose for a third year in a row with a 3% lift in 2022 to a 10-year high of 180.6 million oz. 

The outlook for 2023, says the Silver Institute, is for another year of solid demand. Industrial fabrication should reach an all-time high, boosted by continued gains in the solar market and other industrial segments. Although demand from bars, coins, and jewelry is forecast to fall short of last year’s exceptional levels, it is expected to remain historically high. 

“Looking ahead, in spite of the recent boom in investor demand and the rally, we believe that 2023 will see much of a repeat of last year,” reads the report, which forecasts a projected 142.1 million oz. deficit — the second largest deficit in more than 20 years. 

“We also think that institutional investment will eventually run out of steam, as we believe that the current market consensus that the Fed will be forced to cut rates in H2 will be proven wrong. This should see silver fall to the low US$18.00s (per oz.) before year-end, culminating in a full year average of US$21.30, down 2%.”

According to the Silver Institute’s projections, silver supply in 2023 will likely achieve only low single-digit gains, with global silver inventories falling to 430.9 million oz. by the end of this year, compared to their December 2020 peak.