Philip Newman, Managing Director at Metals Focus, and his colleague, Adam Webb, Director of Mine Supply, presented the findings.

The Interim Review features historical supply and demand statistics and provisional estimates for 2020. The following are the key highlights from the presentation:
 

  • * Physical investment is expected to surge by 27% to 236.8 Moz in 2020, which would be a 5-year high. The largest retail market for bars and coins, the US, will lead the way with a projected 62% gain. This reflects the impact of increased price volatility and healthy price expectations. The second largest market, India, however, has experienced a markedly weaker second half, with outright liquidations, resulting in an estimated 20% decline for the full year.
  • * The most significant development in the silver investment market this year has been the strength of silver-backed exchange-traded product (ETP) demand. Year-to-date gains (through 13th November) have reached 326 Moz. As a result, global holdings have for the first time comfortably surpassed 1 billion ounces, achieving a new record high of 1.062 billion ounces.
  • * This year, the silver price has risen strongly, achieving an intra-year gain (through 13th November) of 38%, as the Covid-19 pandemic has led to a surge in safe haven demand. In terms of the full year average, Metals Focus expects the silver price to rise by 27% y/y to average $20.60. This would represent the highest annual average since 2013.
  • * Silver mine production is expected to fall by 6.3% in 2020 to 780.1 Moz. This reflects Covid-19 lockdowns implemented by several major silver producers during the first half of the year, which required mines to temporarily halt production. This led to lower output from Mexico, Peru and China.
  • * Global silver jewellery and silverware demand are expected to fall by 23% and 34% respectively in 2020, to 153.6 Moz and 40.8 Moz. Heavy losses in India underpin the weakness in each segment. This, in turn, reflects the impact of widespread lockdowns (to combat the pandemic) which hit disposable incomes, elevated -- and at times record -- rupee silver prices, and a weak Indian economy. 
  • * The world’s second largest jewellery consumer, the US, also weakened, although the extent of the decline was more modest than for gold and heavy destocking implies a sharp turnaround soon for this market’s suppliers.