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Global Silver Demand Set to Reach New Record High in 2024 Amid Persistent Supply Deficit

 
 Global Silver Demand Set to Reach New Record High in 2024 Amid Persistent Supply Deficit (photo credit: SHUTTERSTOCK)
Global Silver Demand Set to Reach New Record High in 2024 Amid Persistent Supply Deficit
(photo credit: SHUTTERSTOCK)

Silver Market Facing 4th Straight Deficit in 2024 as Industrial Demand Hits Record - Silver Institute Forecasts

According to the latest industry report from the Silver Institute, the global silver market is poised to see its fourth consecutive year of physical supply deficit in 2024. The industry group's analysis, presented at their Annual Silver Industry Dinner, projects robust growth in silver demand that will outpace modest increases in mine production and recycling.

The Silver Institute's report, authored by Metals Focus analysts Philip Newman and Sarah Tomlinson, forecasts total silver demand to rise 1% year-over-year in 2024, reaching a new record high of 1.21 billion ounces. This surge in demand will occur despite an expected 15% decline in physical investment, which the analysts attribute to the lack of major economic crises driving safe-haven buying.

The primary driver of the increase will be industrial applications, which are forecast to grow 7% to over 700 million ounces - a new all-time high. Green economy uses, particularly in the photovoltaic sector, as well as increased demand from the automotive industry, will be the main pillars of this industrial demand growth.

Silver jewelry and silverware fabrication are also projected to see solid 5% gains, led by a recovery in the key Indian market following a cut to the silver import duty.

On the supply side, global silver mine production is expected to rise by just 1% in 2024, reaching 837 million ounces. Increases from Mexico, Chile and the US will offset declines in other major producers like Peru, Argentina and China. Additionally, silver recycling is forecast to grow 5% to a 12-year high.

The net result of these demand and supply dynamics will be a physical market deficit of 182 million ounces in 2024 - little changed from the previous year, but still elevated by historical standards. The Silver Institute analysts believe this deficit is likely to persist in the coming years.

"The silver market is set to record a physical deficit in 2024 for the fourth consecutive year," said Philip Newman of Metals Focus. "Record industrial demand and a recovery in jewelry and silverware will lift total demand, while mine supply will rise by just 1%."

The findings from the Silver Institute's report point to an increasingly tight silver market in 2024, which could lend support to silver prices that have already rallied 29% so far this year. 

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