The global silver market realized growth in every demand category in 2021, marking the first time all key sectors rose in tandem since 1997. Surpassing pre-pandemic volumes, total global silver demand achieved its highest level since 2015, surging 19 percent to 1.05 billion ounces during 2021. Leading the way was an all-time high for silver’s use in industrial applications, rising 9 percent to 508.2 million ounces.

Physical silver investment (sales of silver coins and bars) leaped by 36 percent to 278.7 million ounces, its highest level since 2015, as retail investors in North America and Europe, motivated by safe-haven and inflationary concerns, took advantage of periodically lower silver prices to purchase coins and bars.

Of note, this past year, the silver market experienced its first deficit since 2015, at 51.8 million ounces, its most significant shortage since 2010.

These developments, along with other important segments of the global silver market, are discussed in World Silver Survey 2022, released by The Silver Institute.

All categories of silver demand strengthened last year. Silver’s use in photovoltaics increased 13 percent to 113.7 million ounces as global solar installations grew, while electronic and electrical demand overall rose by 9 percent to 330 million ounces. In 2021, silver also saw rising end-use in the defense and aerospace sectors. Brazing and alloys accounted for 47.7 million ounces, representing a 6 percent gain over 2020.

Silver jewelry fabrication jumped by 21 percent in 2021 to 181.4 million ounces.

Physical silver investment grew 36 percent to 278.7 million ounces, the highest level since 2015.

2021 was another year of net annual inflows into silver-backed exchange-traded products. With a rise of 65 million ounces, combined exchange-traded product holdings rose to another record high of 1.13 Boz. Gains were concentrated early in 2021, benefiting from the social media focus on silver. Importantly, there was little sign of liquidations during late 2021, which typified the institutional investment market.

The 2021 annual average silver price was $25.14, a 22 percent gain over 2021. Since 2017, the average yearly silver price has increased by 47 percent.

Global mined silver production grew by 5.3 percent in 2021, reaching 822.6 million ounces. This increase was the most significant annual growth in mined silver supply since 2013 and was driven by the recovery in output following COVID-19-related disruption in 2020.

Physical silver investment is likely to be broadly flat this year, as a modest fall in Western investment will be offset by further gains in India. Investment in exchanged-traded products is forecast to increase by 25 million ounces, for a fourth consecutive annual rise. The average yearly silver price is forecast at $23.90, which, if realized, would represent the second-highest annual average since 2011.

This article was excerpted from a report by The Silver Institute. Read the complete report here.