Silver market deficit plunged 95% in 2014

Author: Paul Ploumis 07 May 2015 Last updated at 08:30:18 GMT

MUMBAI (Scrap Monster): The rising silver mine production and apparent slow down in Chinese consumption resulted in sharp drop in silver deficit during 2014. According to the latest report compiled by GFMS for Silver Institute, the market deficit plunged by 95% during the year. The overall deficit dropped to just 4.9 million ounces in 2014 as compared with the deficit of 111.9 million ounces during 2013.

The fall in prices and increased demand from India lifted jewellery fabrication demand to record high of 215.2 million ounces during the year. The Indian silver jewellery demand surged higher by 47% to 62.2 million ounces. Notable gains were also reported from other regions such as Europe and North America. The silver jewelry fabrication demand in these regions grew by 9.3% and 2.2% respectively. Globally, silver jewelry fabrication demand recorded second consecutive year of rise, posting a growth of 1.5% over the previous year. Silverware off take rose to highest level since 2006.

The Silver coin and bar purchases touched new highs in 2014. The Silver coins and medals demand totaled 107.6 million ounces during the year. Coin demand reported strong growth in key markets such as the US, Canada, India and Spain.

The silver ETF holdings increased by 1.4 million ounces to close the year 2014 at 636 million ounces. This is at a time when gold holdings registered a year-on-year drop of nearly 9% during the year. Physical demand for silver bullion bars touched 88.4 million ounces. Strong demand for silver bars was seen in India. On the other hand, silver bar demand dropped in the US, China and Europe.

The silver scrap supply declined for the third consecutive year. Scrap supply dropped 13% in 2014 to 168.8 million ounces, the lowest level since 1996. The proportion of scrap supply dropped to 15% as compared with 25% in 2011 and 2012.