LONDON – International demand for silver will rise to 1.025-billion ounces in 2021, its highest in eight years, as buyers and business ramp up purchases, the Silver Institute mentioned this week, predicting that costs would rise.
The coronavirus outbreak triggered a rush amongst buyers to stockpile silver, which like gold is historically seen as a secure place to retailer cash.
That impetus will proceed, the institute mentioned, predicting purchases of bars and cash would rise to a six-year excessive of 257 million ounces in 2021.
It didn’t give a forecast for change traded funds (ETFs) storing silver bars for bigger buyers, however these have grown strongly up to now this 12 months, serving to push costs to an eight 12 months excessive of $30.03 an oz. on February 1.
Silver can be utilized in industries reminiscent of electronics and photo voltaic panels, and demand will rise because the pandemic is introduced underneath management and the worldwide economic system rebounds, the institute mentioned.
Industrial demand will rise 9% from 2020 to a four-year excessive of 510 million ounces, it mentioned.
Demand for silver for jewelry will rise to 174 million ounces however stay beneath ranges seen earlier than the pandemic.
On the provision aspect, mine manufacturing ought to rise to 866 million ounces this 12 months, probably the most since 2016, as disruption brought on by the pandemic recedes, and recycled provide will enhance for a fifth 12 months, the institute mentioned.
The market shall be barely oversupplied, its sixth consecutive annual surplus, the institute mentioned. It calculates its supply-demand stability with out counting ETFs.
“The outlook for the silver value in 2021 stays exceptionally encouraging, with the annual common value projected to rise by 46 % to … $30,” it mentioned in an announcement.
“Given silver’s smaller market and the elevated value volatility this could generate, we count on silver to comfortably outperform gold this 12 months.”
The Silver Institute prepares its studies with assist from Metals Focus, a treasured metals consultancy.