Building upon the momentum of 2022’s surge in silver consumption for industrial applications, 2023 saw yet more record-breaking industrial demand, reaching 654.4-million ounces, fuelled by the expanding landscape of green economy initiatives.

While there was a slight downturn in overall silver demand attributed to reduced interest from price-sensitive sectors such as physical investment, jewellery and silverware, the industrial demand segment demonstrated steadfast growth.

According to the recently published ‘World Silver Survey 2024’ by the Silver Institute, total silver demand decreased by 7% last year to 1.2-billion ounces.

However, higher-than-expected photovoltaic (PV) capacity additions and faster adoption of new-generation solar cells raised global electrical and electronics demand by a substantial 20%. At the same time, other green-related applications, including power grid construction and automotive electrification, also contributed to the gains.

Notably, Chinese silver industrial demand soared by an impressive 44%, reaching 261.2-million ounces, primarily fuelled by the expansion of green applications, notably PV. China’s dominance in PV production, accounting for more than 90% of global panel shipments last year, played a crucial role in driving the surge. In the US, industrial demand remained relatively stable at 128.1-million ounces, mirroring figures from 2022, while Japan saw a similar trend with industrial offtake remaining essentially unchanged at 98-million ounces.

Meanwhile, the market remained in a deficit for the third consecutive year, with 2023 marking a structural deficit of 184.2-million ounces.

Global silver mine production experienced a 1% decline, falling to 830.5-million ounces. Output was significantly affected by the four-month suspension of operations at Newmont’s Peñasquito mine, in Mexico, following a labour strike. Mexico’s silver output fell by 5% to 202.2-million ounces.

Despite its challenges, Mexico retained its position as the leading silver mining country, followed by China, Peru, Chile and Bolivia.

Silver recycling, accounting for 18% of total supply last year, grew by 1% to 178.6-million ounces.

Looking ahead, the Silver Institute expects 2024 to be a solid year for silver demand, which is forecast to grow by 2%. Industrial fabrication is projected to reach another all-time high, rising by 9%, propelled by an anticipated 20% gain in the PV market and healthy offtake from other industrial segments.

Jewellery and silverware fabrication are predicted to rise by 4% and 7%, respectively, while bar and coin demand is forecast to contract by 13%.

Total silver supply is expected to decrease modestly by 1%, resulting in another large deficit of 215.3-million ounces – the second-biggest market deficit in more than 20 years.