About Silver Production
Demand for silver is expected to reach a record high in 2022, driven by high levels of industrial, metal and silver purchases and physical investment. These are some of the key findings of Philip Newman, CEO of Metals Focus, and Adam Webb, CEO of Mining Supply, during the Silver Institute’s Interim Silver Market Research in New York today, which showed supply historical and statistical requirements and plans for 2022. Here are the highlights of the show:
Global silver demand is expected to hit a record high of 1.21 billion ounces in 2022, up 16% from 2021. Every major demand segment except for stock is expected to post new highs. . Industry demand is expected to grow to 539 million ounces (Moz). Developments such as continued electrification (despite weak car sales), growing adoption of 5G technology, and government commitments to green infrastructure will help companies drive major economies and declines in consumer electronics. Investments in meat in 2022 are on track to jump 18% to 329 Moz, which will be a new record. Support from investors fearing high prices, Russian-Ukrainian war, fear of recession, lack of confidence in the government and buying and falling prices. This increase was continued by (near-double) India’s demand, recovering from last year’s recession, where investors often took advantage of the low value of the rupee.
On the other hand, it is expected that these convertible products will see a significant reduction each year to a total of 110 Moz, in part due to the higher volatility of silver than gold, which has the easier it is to get the benefits. Investors in the industry should maintain a bearish position as it is expected that real yields will strengthen, encouraging another look from the white metal.
This year, Metals Focus expects the price of silver to fall 16% annually to $21.00. Until November 7, prices fell 14% over a year. Metals Focus expects the US Fed to continue to raise interest rates, increasing the availability of precious metals, which, combined with the increasing rise in the strength of the dollar going forward, will continue to increase. put pressure on silver prices. Other concerns will also come from the industrial nature of silver, because the rising fear of a possible recession will fall into the imagination, despite its great support.
In 2022, silver production is expected to increase 1% annually to 830 Moz. Mexico’s production will increase significantly as several large new silver projects that have been commissioned in recent years continue to ramp up. Silver production as a by-product from existing mines and new projects in Chile will also be a major contributor to growth. These increases will be offset by lower production from silver producers such as Peru, China and Russia. Inflation, mainly due to higher oil and gas prices, has put upward pressure on miners’ prices in 2022. However, in the first half of the year, the increase in silver miners’ wages was more than offset by the increase in income from products. As a result, the H1.22 aggregate support price (AISC) fell 10% YoY to $9.72/oz. The prices of metals from products fell in the second half of the year and as a result, it is expected that the prices of silver miners will rise to H2.22.
Gold and silver are expected to jump 29% and 72% to 235 Moz and 73 Moz respectively on the back of India’s unprecedented recovery. This is partly due to strong inventory pre-holiday and wedding season, followed by significant inventory reductions in 2021.
The global silver market is expected to register a second consecutive deficit this year. At 194 Moz, that would be a decade high and four times more than what was seen in 2021.
Top 5 Countries Have the Highest Silver Production
Russia doubles that of the United States but produced only 1,300 metric tons in 2021. Russia’s silver deposits are estimated at 45,000 metric tons.
Chile produced 1,600 metric tons in 2021. Chile is the size of Texas and has silver reserves of 26,000 metric tons. 3. Peru
Peru has continued to increase its silver production level and maintained the second position from 2018 to 2019. The South American country produced 3,000 metric tons of silver in 2021, compared to 4,160 metric tons in 2018 due to the COVID-19 pandemic and the ongoing movement restrictions that some workers have killed. While a small country, Peru has the largest silver reserves in the world at 91,000 metric tons. 1
In 2021, China produced 3,400 metric tons of silver. The country lost second place to Peru in 2016 but regained it in 2020.
The first country to produce silver in the world was Mexico. The country produced 5,600 metric tons in 2021. It is expected that silver production in Mexico will increase further.