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World Silver Survey 2016

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WORLD SILVER SURVEY 2016

Silver Cover 2016.indd 5 24/03/2016 16:01:35

THE SILVER INSTITUTE
(major funding companies)

Asahi Refining
Barrick Gold Corp.
Cia. de Minas Buenaventura, S.A.A.
Coeur Mining, Inc.
Fresnillo Plc
Hecla Mining Company
Industrias Peñoles, S.A.B. de C.V.
Pan American Silver Corp.
Silver Wheaton Corp.
 WORLD SILVER SURVEY
2016
Produced for The Silver Institute
by the GFMS team at Thomson Reuters
BY
Rhona O’Connell, Head of Metals Research & Forecasts
William Tankard, Manager, Mining
Cameron Alexander, Manager, Regional Demand
Ross Strachan, Manager, Regional Demand
Sudheesh Nambiath, Lead Analyst
Karen Norton, Senior Analyst (Base Metals)
Saida Litosh, Senior Analyst
Janette Tourney, Senior Analyst
Johann Wiebe, Senior Analyst
Wenyu Yao, Senior Analyst (Base Metals)
Erica Rannestad, Senior Analyst
Samson Li, Senior Analyst
Dante Aranda, Analyst
Tamara Imangaliyeva, Analyst
Natalie Scott-Gray, Analyst
Gregory Rodwell, Analyst
Alex Ji, Analyst
Helen Cheng, Analyst

OTHER CONTRIBUTORS:
Bruce Alway, Manager, Mining (Base Metals)
Ling Wong, Senior Analyst (Base Metals)
Vicky Bakourou, Analyst (Base Metals)
Beverley Salmon, Customer Relationship Manager
IFR Production, Thomson Reuters

Thomson Reuters The Silver Institute

The Thomson Reuters Building, 30 South Colonnade, 1400 I Street, NW, Suite 550
London, E14 5EP, UK Washington, D.C., 20005, USA
E-mail: GFMS@thomsonreuters.com Telephone: +1-202-835-0185
Web: financial.tr.com/eikon-metals info@silverinstitute.org
www.silverinstitute.org
ABOUT THE MAJOR SPONSORS OF WORLD SILVER SURVEY 2016
Coeur Mining, Inc.
Coeur Mining is the largest U.S.-based primary silver producer and a significant gold
producer with five precious metals mines in the Americas employing approximately
2,000 people. Coeur produces from its wholly owned operations: the Palmarejo silver-
gold mine in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold
mine in Alaska, the Wharf gold mine in South Dakota, and the San Bartolomé silver
mine in Bolivia. The Company also has a non-operating interest in the Endeavor mine
in Australia in addition to royalties on the El Gallo complex in Mexico, the Zaruma
mine in Ecuador, and the Correnso mine in New Zealand. In addition, the Company has
two silver-gold exploration projects - the La Preciosa project in Mexico and the Joaquin
project in Argentina. The Company also conducts ongoing exploration activities
in Alaska, Argentina, Bolivia, Mexico, and Nevada. The Company owns strategic
investment positions in several silver and gold development companies with projects in North and South America.

Fresnillo Plc
Fresnillo plc is the world’s largest primary silver producer and Mexico’s
second largest gold producer, listed on the London and Mexican Stock
Exchanges under the symbol FRES. Fresnillo plc has six operating
mines, all of them in Mexico - Fresnillo, Saucito, Ciénega (including the
San Ramón satellite mine), Herradura, Soledad-Dipolos1 and Noche
Buena; two development projects - San Julián and the Pyrites plant,
and four advanced exploration prospects - Orisyvo, Juanicipio, Las Casas Rosario & Cluster Cebollitas and Centauro
Deep as well as a number of other long term exploration prospects. In total, Fresnillo plc has mining concessions
covering approximately 2 million hectares in Mexico. Fresnillo plc has a strong and long tradition of mining, a proven
track record of mine development, reserve replacement, and production costs in the lowest quartile of the cost curve.
Fresnillo plc’s goal is to maintain the Group’s position as the world’s largest primary silver company, producing 65
million ounces of silver and 750,000 ounces of gold by 2018.
1
Operations at Soledad and Dipolos are currently suspended.

Industrias Peñoles, S.A.B. de C.V.

Peñoles is a mining group with integrated operations in smelting and refining non-ferrous
metals, and producing chemicals. Peñoles is the world’s top producer of refined silver,
metallic bismuth and sodium sulfate, and the leading Latin American producer of refined
gold and lead. The Company was founded in 1887 and it is part of “Grupo BAL”, a privately
held diversified group of independent Mexican companies. Peñoles’ shares have traded on
the Mexican Stock Exchange since 1968 under the ticker PE&OLES.
Peñoles highlights:
• Began operations in 1887 as a mining company.
• Has integrated operations in the areas of exploration, mining, metallurgy and chemicals.
• Listed on the Mexican Stock Exchange since 1968; the stock is included in the IPC index.
• One of the largest net exporters in Mexico’s private sector.
Pan American Silver Corp.
Pan American Silver, a silver mining company founded in 1994,
is currently the second-largest primary silver producer world-
wide, with seven operating mines in Mexico, Peru, Bolivia and
Argentina, as well as mineral deposits and projects in the
USA, Mexico, Peru and Argentina. Our mission is to be the world’s pre-eminent silver producer, with a reputation
for excellence in discovery, engineering, innovation and sustainable development. Our team of industry-leading
professionals has proven experience in exploration, project development, operations, and finance. In 2015, we produced
a record 26.12 million ounces of silver and 183,700 ounces of gold at cash costs* of $9.70 per ounce of silver, and All-in
Sustaining Costs per Ounce Sold (“AISCSOS”)* of $14.92. In 2016, we expect to produce 24.0 to 25.0 million ounces
of silver and 175,000 to 185,000 ounces of gold at cash costs* of $9.45 to $10.45 per ounce of silver, and AISCSOS*
of $13.60 to $14.90. In addition we plan to spend between $65.0 and $75.0 million in sustaining capital and between
$135.0 and $140.0 million on expansion projects, mainly at La Colorada and Dolores.
*net of by-product credits

Silver Wheaton Corp.

Silver Wheaton is the world’s largest pure precious metals streaming
company. The company offers investors cost certainty, leverage to
increasing silver and gold prices, and a high-quality asset base. Its
business model is based on paying low, predictable costs for precious
metals streams from a diverse portfolio of mines, with any increases
in precious metal prices flowing directly to the bottom line. Silver
Wheaton offers these benefits while at the same time seeks to reduce many of the downside risks faced by traditional
mining companies. In particular, it offers its investors both capital and operating cost certainty. Other than the initial
upfront payment, the company typically has no ongoing capital or exploration costs. Furthermore, operating costs
have been historically fixed at around $4 per ounce of silver produced and $400 per ounce of gold produced, subject to
inflationary adjustments.
 World Silver Survey 2016 has been kindly supported
by the following companies

MAJOR SPONSORS

Coeur Mining, Inc. Fresnillo Plc

Pan American Silver Corp. Industrias Peñoles S.A.B. de C.V. Silver Wheaton Corp.

SPONSORS

Barrick Gold Corporation Compañia de Minas Buenaventura S.A.A. Hecla Mining Company

Italpreziosi KGHM Polska Miedź S.A. Scotiabank

CONTRIBUTORS
Asahi Refining Tanaka Kikinzoku Kogyo K. K.
Endeavour Silver Corp. TD Bank
International Depository Services Group Valcambi sa
Republic Metals Corporation
The World Silver Survey has been published annually by The Silver Institute since 1990. Copies of previous editions can
be obtained by contacting The Silver Institute at the address and telephone number on the opening page. For copies
outside of North America, contact Thomson Reuters at the address on the page overleaf.

ISSN: 1059-6992 (Print)

ISSN: 2372-2312 (Online)
ISBN: 978-1-880936-26-9 (Print)
ISBN: 978-1-880936-27-6 (Online)

© Copyright May 2016. The Silver Institute and Thomson Reuters.

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contract or otherwise, even if foreseeable.
This is the twenty-sixth annual edition of the World Silver Survey produced for The Silver Institute. The World Silver
Survey is produced by the GFMS team at Thomson Reuters, globally-based analysts of the metals markets. The
information contained herein is based in part on the analysis of publicly available data such as hallmarking series,
trade statistics, company reports and other public-domain information. More importantly, it is also based on a series of
interviews with the industry’s main players, carried out every year by our team of analysts, which provide the essential
data to allow the compilation of reliable estimates for world supply and demand.

Thomson Reuters is grateful to the many miners, refiners, bullion dealers, bankers and fabricators throughout the
world who have contributed their time and information to ensuring that the picture of the industry described in the
World Silver Survey is as complete and accurate as possible.

Thomson Reuters, London

The Thomson Reuters Building, 30 South Colonnade,
London, E14 5EP, UK
E-mail: GFMS@thomsonreuters.com

UNITS USED:
supply and demand data are given in units of million troy ounces (Moz) rounded to one decimal place.
1 Moz = 31.103 t (metric tons)
1 ton = 32,151 troy ounces
1 ton = 1,000,000 grams (g)

TERMINOLOGY:
“-” Not available or not applicable.
“0.0” Zero or less than 0.05.
“dollar”, “$” US dollar unless otherwise stated.
“Identifiable Investment” The sum of physical bar investment and all coin fabrication, plus the net change
in Exchange Traded Product (ETP) holdings.
“Physical Surplus/ Deficit” The difference between the supply of new and secondary silver to the market in
a calendar year and measurable demand for physical silver. This excludes
opaque Over the Counter (OTC) investment in silver and commercial bank
transactions.
“Net Balance” The physical surplus or deficit of silver with the addition of highly visible ETP and
exchange stock inventory changes.
PRICES:
Unless otherwise stated, US dollar prices are for the London Silver Market fixing prior to August 15, 2014. As of this
date prices refer to the LBMA Silver Price as successor to the silver fix.

TABLE ROUNDING:
Throughout the tables and charts, totals may not add due to independent rounding.
TABLE OF CONTENTS
1. Summary and Outlook 8
Supply in 2015 10 • Demand in 2015 10

2. Silver Prices 12
• Chinese Silver Premia 14 • Silver in Other Currencies 15 • Gold: Silver Ratio 15

3. Investment 17
• Overview 17 • OTC Market 18 • Exchange Traded Products 19 • Physical Bar Investment 22
• Commodity Exchanges Activity 23 • Coins and Medals 24

4. Mine Supply 26
• Mine Production 26 • Outlook 33 • By-product Analysis 33 • Production Costs 35
• Producer Hedging 36

5. Supply from Above-ground Stocks 37

• Overview 37 • Identifiable Bullion Stocks 37 • Custodian Vault Stocks 38
• Futures Exchanges 39 • Government Stocks 41 • Industry 41 • Scrap 41

6. Silver Bullion Trade 45

• Europe 45 • The Americas 47 • Middle East and Indian Sub-Continent 47
• East Asia 49

7. Industrial Fabrication 51
• Industrial Fabrication by Region 53 • Photography 63 • Photovoltaic 65

8. Jewelry and Silverware 67

• Jewelry 67 • Silverware 75

9. Appendices 78

MAJOR TABLES
• World Silver Supply and Demand 8 • Coins and Medals 25 • Mine Production 28
• Scrap Supply 43 • Industrial Applications 52 • Electrical and Electronics 58
• Brazing Alloys and Solders 62 • Photography 63 • Jewelry 73 • Silverware 76

FOCUS BOXES
• World Silver Survey: Supply and Demand Methodology 9 • Silver and Other Commodity Prices 16
• Investment in Commodities 20 • An Overview of Corporate Transactions 32
• Silver ETP Holdings by Vault Location 40 • Silver Ethylene Oxide Catalyst Market 60
• New and Growing Sources of Demand for Silver 61
• The Changing Face of Silver Jewelry 70
 WORLD SILVER SURVEY 2016

1. SUMMARY AND OUTLOOK

In 2015, silver retail investment and jewelry fabrication Investors took last year’s price declines as an opportunity
SUMMARY AND OUTLOOK

hit a record high and mine production growth declined to for bargain hunting in the physical market, however,
its slowest pace in four years. The silver market realized accumulating 292.3 Moz (9,092 t) of coins and bars, a 24%
an annual physical deficit for the third consecutive year in surge from the previous year. This increase followed a 2%
2015. The market’s deficit of 129.8 Moz (4,038 t) was more decline in 2014. The acceleration of physical purchases last
than 60% larger than the previous year’s deficit of 78.6 Moz year was triggered by silver’s drop toward multi-year lows,
(2,445 t) and the third largest on record. Meanwhile, silver which boosted coin buying, and a subsequent shortage
prices averaged $15.68/oz, down 17.8% from 2014, the of national mint coins globally. The shortage emerged
fourth consecutive annual drop. first in North America, when the U.S. Mint halted sales
of American Eagles for almost three weeks in July due to
Silver prices were dragged lower by investor expectations depleted inventory. Shortages and rationing quickly spread
for an interest rate hike in the United States and a to the Royal Canadian Mint, the Perth Mint, the Austrian
weakening Chinese economy. These two factors negatively Mint, and others. Arguably, the systemic shortage across
impacted silver because of its dual nature as a financial the silver coin minting industry was unprecedented.
asset and an industrial commodity. Money manager
positions in COMEX silver futures and options fell into In the first quarter of 2016, although safe haven demand
negative territory in the third quarter of last year amid was the primary driver, the relatively stronger market
relatively low prices and industrial fabrication demand for fundamentals acted as a spring board for silver prices,
silver slipped by 4% mostly due to a 9% drop in China. The particularly given the continued elevated demand for coins
equity market decline in China also weighed on investor and swelling concern about mine supply reduction in the
sentiment. future.

TABLE 1 - WORLD SILVER SUPPLY AND DEMAND

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Supply
Mine Production 643.4 667.7 684.7 717.3 753.0 757.6 790.8 823.7 868.3 886.7
Net Government Sales 78.5 42.5 30.5 15.6 44.2 12.0 7.4 7.9 - -
Scrap 207.1 204.2 202.0 201.2 227.5 261.5 255.5 192.1 168.3 146.1
Net Hedging Supply -11.6 -24.1 -8.7 -17.4 50.4 12.2 -47.1 -34.8 16.8 7.8
Total Supply 917.3 890.3 908.6 916.7 1,075.2 1,043.3 1,006.6 988.9 1,053.3 1,040.6
Demand
Jewelry 174.5 182.3 177.6 176.9 190.0 187.9 185.4 217.8 224.0 226.5
Coins & Bars 50.7 56.1 192.3 91.6 144.4 210.4 160.5 242.1 236.1 292.3
Silverware 62.1 60.2 58.4 53.2 51.6 47.2 43.7 58.8 60.7 62.9
Industrial Fabrication 648.9 661.0 656.8 542.6 650.3 676.3 615.0 619.1 611.2 588.7
….of which Electrical & Electronics 242.3 262.5 271.7 227.4 301.2 290.8 266.7 266.0 263.4 246.7
...of which Brazing Alloys & Solders 54.7 58.3 61.6 53.6 60.9 62.7 60.6 63.2 66.1 61.1
...of which Photography 142.2 117.0 98.2 76.4 67.5 61.2 54.2 50.5 48.5 46.7
...of which Photovoltaic* - - - - - 75.8 62.9 62.5 63.2 77.6
...of which Ethylene Oxide 6.6 7.9 7.4 4.8 8.7 6.2 4.7 7.7 5.0 10.2
...of which Other Industrial* 203.1 215.3 217.9 180.4 212.1 179.4 165.8 169.3 165.1 146.4
Physical Demand 936.3 959.6 1,085.1 864.2 1,036.4 1,121.8 1,004.6 1,137.9 1,131.9 1,170.5
Physical Surplus/Deficit -19.0 -69.3 -176.6 52.5 38.8 -78.5 2.0 -149.0 -78.6 -129.8
ETP Inventory Build 126.8 54.8 101.3 156.9 129.5 -24.0 55.3 2.5 1.5 -17.7
Exchange Inventory Build -9.0 21.5 -7.1 -15.3 -7.4 12.2 62.2 8.8 -8.8 0.3
Net Balance -136.8 -145.5 -270.7 -89.2 -83.3 -66.7 -115.5 -160.2 -71.3 -112.5
Silver Price, $ per oz. 11.55 13.38 14.99 14.67 20.19 35.12 31.15 23.79 19.08 15.68
*Photovoltaic demand included in “Other Industrial” prior to 2011
© GFMS, Thomson Reuters / The Silver Institute

8
 WORLD SILVER SURVEY 2016

WORLD SILVER SURVEY: SUPPLY AND DEMAND roughly one half of the total loco London market volume,
METHODOLOGY which in turn makes up approximately 90% of global
total turnover. In 2015, therefore, total volume was of

SUMMARY AND OUTLOOK

Physical surpluses and deficits in the silver market explain the order of 81.7 billion ounces (2.54 M t) with a value
and sometimes, to an extent, influence price trends, lead of $1.3 trillion; this is equivalent to over 90 times annual
times, margins and premia. These physical surpluses mine production.
and deficits are not the only factor driving short term
price movements, however, because unlike the purely The final element that differentiates silver from purely
industrial metals there is significant demand for silver as a industrial metals is that it is commonly recycled or held
financial asset. We estimate that in 2015, 25% of demand as an above-ground asset by private and institutional
for new silver came from the physical coin and bar sector investors, users, dealers, banks, and other entities. Shifts
as investors increased private holdings. Coin and bar in these inventories, whether accumulations or sales into
demand excludes investment in silver via exchange traded terminal markets, affect prices as well.
products. Many of these products are backed by physical
silver held in bank vaults and depositories. Changes in Thomson Reuters’ supply and demand data are collected
these holdings are reflected in a separate data series and collated by a team of full time research analysts
in our supply-demand balance, but nonetheless also based in Australia, China, the United Kingdom, India
represent a source of physical investment. and the United States within an extensive field research
program that involves interviewing stakeholders across
In addition to physical investment, silver has an active the supply chain. In order to build market statistics, the
Over-the-Counter (OTC) market, serving as a mechanism GFMS team at Thomson Reuters maintains individual
for risk and price management. OTC trade can have demand databases for over 85 countries globally and for
a meaningful impact on silver prices because of the almost 600 mines and projects on the supply-side. As
market’s depth. In 2015, the volume of silver transferred part of the primary research program, analysts collect
in the London bullion market, the largest OTC market for information on jewelry and silverware fabrication, coin
silver worldwide, totaled approximately 36.8 billion troy fabrication and sales, bar sales, industrial fabrication,
ounces (1.14 M t), with a value of $575 billion, according refining volumes, shifts in above ground bullion stocks,
to data published by London Bullion Market Association. and scrap sales. In addition to this, on a global basis,
Even this figure does not represent the total value of Thomson Reuters also collects information and data
global silver transactions. As a rule of thumb, these net on net government sales and purchases and collates
transfers, which exclude physical movements arranged producer hedging and de-hedging levels.
by clearing members in locations outside London, are

SILVER PHYSICAL SURPLUS / DEFICIT WORLD COIN AND BAR DEMAND

150 Real Silver Price 40 350 Other 40

Surplus China
100 300 Europe 35
India
30 250 North America 30
Constant 2015 US$/oz

50
Constant 2015 US$/oz

Real Silver price

Million Ounces

200 25
Million Ounces

0
20 150 20
-50
100 15

-100 50 10
10

-150 0 5
Deficit
-200 0 –50 0
2006 2008 2010 2012 2014
1990 1995 2000 2005 2010 2015
Source: GFMS, Thomson Reuters
Source: GFMS, Thomson Reuters

9
 WORLD SILVER SURVEY 2016

SUPPLY IN 2015 market and some processors held back material awaiting
higher prices. As a result, scrap fell to its lowest since
• Global mine production growth slowed to 2% last year, 1992, of 146.1 Moz (4,545 t). Indeed, if it was not for many
SUMMARY AND OUTLOOK

setting a record annual total of 886.7 Moz (27,579 t). emerging markets’ currencies weakening appreciably
supply would have been even lower.
• Gains in mine supply were more than offset by weak scrap
supply, falling by 13% year-on-year and representing a The producer community added silver hedges last year,
22.2 Moz (691 t) decline. to leave the hedge book amounting to 38.9 Moz (1,213 t).
GFMS calculates that delta hedging activities on behalf of
Worldwide silver mine production increased for a 13th the producers created 7.8 Moz (244 t) of accelerated silver
consecutive year to a record high of 886.7 Moz (27,579 t), supply over the year. The greatest contributions to this
although the rate of growth, at 2%, was less than half that came from additional price risk management by Industrias
of the previous three years. Notable country-level increases Peñoles and Hochschild Mining.
included Peru, Argentina, Russia and India. Providing
an offset are examples of situations where price-driven DEMAND IN 2015
curtailments are starting to impact silver supply, most
materially so far in Canada, Australia and, to a lesser • Total physical demand rose to a record high of 1,170.5 Moz
extent, in Bolivia. Chinese production, meanwhile, dipped (36,405 t) in 2015, up 3% from the previous year.
by 3%, and it is likely that policy announcements made last
year will drive further reductions in small scale production • The largest contributor to total demand growth was coin
and enhance demand for imported silver-rich concentrate. and bar investment, which surged 24% last year to reach
However, there have also been incidences where lower a record high of 292.3 Moz (9,092 t), on the back of strong
commodity prices have driven downstream optimization North American and Indian purchases.
in order to realize enhanced value from the production
process. Examples from the lead/zinc industry include the • Jewelry fabrication increased for the third consecutive year
sale of precious metals tied up in stockpiles at the Cerro de and hit a fresh record high of 226.5 Moz (7,045 t). Strong
Pasco following the construction of a silver leach plant in growth in Indian and North American fabrication offset a
Peru, and a program to sell accumulated pyrite concentrate near one third drop in Chinese fabrication.
at Bisha in Eritrea; these two initiatives alone added
3.5 Moz (109 t) of production last year. • Industrial fabrication fell to 588.7 Moz (18,311 t), down
4% from the previous year. Declines in electronics, brazing
Multi-year price lows led to scrap supply dropping by alloys & solders, and photography were offset to an extent
13%. Behind the decline were fewer collectors active in the by record high solar and ethylene oxide catalyst demand.

WORLD SILVER SUPPLY WORLD SILVER DEMAND

Net Hedging Supply

1,300 40 1,400 Jewelry & Silverware 40
Net Government Sales Net Hedging Supply
Real Silver Price
1,100 Real Silver Price 1,200
Net Government Sales
30 Coins & Bars 30
900 1,000
Constant 2015 US$/oz

Constant 2015 US$/oz

Scrap
Million Ounces

Million Ounces

700 800
20 20
500 600

300 400
10 10
Mine Production
100 200
Industrial Applications

-100 0 0 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

10
 WORLD SILVER SURVEY 2016

Total physical demand saw a 3% increase in 2015, Photovoltaic (PV) demand for silver totaled 77.6 Moz
driven by higher retail investment, jewelry and silverware (2,415 t) in 2015, up a significant 23% from the previous
fabrication and solar and ethylene oxide catalyst demand. year. This marks the second consecutive year of increases

SUMMARY AND OUTLOOK

Growth from these sources was offset to a modest extent in this sector, driven by a recovery in growth from all three
by weaker demand from the electronics, brazing alloys primary markets after years of excess capacity, while
and solders, and photographic sectors. Bargain buying growth was particularly strong for Chinese solar panel
benefited coin and bar demand and jewelry and silverware installations.
demand, while industry-specific factors weighed on
demand from the other sources. Silver jewelry fabrication edged higher in 2015, rising 1%
to a new record level of 226.5 Moz (7,045 t). The increase
Global industrial offtake totaled 588.7 Moz (18,311 t) was built largely on the back of an impressive 16% annual
in 2015, a 4% decline from the previous year, to post its rise from India as lower prices drove consumption and
lowest level since 2009. Increases in photovoltaic and industry inventory levels significantly higher. However,
ethylene oxide (EO) demand were more than offset by lower India’s performance was largely curtailed by another
demand for silver in electronics and electrical components, sizable contraction in Chinese fabrication last year as
photographic papers, brazing alloys and solders and other the weaker economy dampened discretionary spending.
miscellaneous applications. Global industrial production Elsewhere, Thailand enjoyed a 16% jump in demand,
grew at its weakest annual rate since 2009, and the boosted by a stronger export sector while North America
economic slowdown in the largest market, China, as well as also recorded a healthy 5% annual increase as lower sticker
ongoing thrifting ensured that global industrial usage fell. prices attracted consumers. Demand was broadly stable
On a regional basis, weak fabrication demand in developing in Europe, while the Middle East retreated 7%. Silverware
countries outweighed almost non-existent growth in fabrication enjoyed the third annual rise in succession to
developed countries. an estimated 62.9 Moz (1,957 t), a ten-year high. Record
offtake levels from India again provided the platform for the
Silver used in photographic applications continued to 4% rise in global demand, while further falls from China,
decline, falling by 4% in 2015, to 46.7 Moz (1,452 t), the due largely to the changes to the gifting culture, limited
lowest level in our series, which began in 1990. To put this further industry expansion.
into perspective, last year’s level was down by 77% from
the record high at the start of the millennium. That said, Identifiable Investment, which includes physical bar
it is worth emphasizing that the pace of decline slowed investment, coins & medals and ETP inventory build,
considerably, to its lowest rate since 2004, as the structural rose by 16% last year, to a seven-year high of 274.7 Moz
changes in the sector towards digital technology approach (8,543 t). A close analysis of individual components of our
maturity. identifiable investment figure reveals that last year’s rise
was primarily due to a jump in coin and bar investment,
SILVER INDUSTRIAL FABRICATION which recorded a 24% year-on-year increase to 292.3 Moz
(9,092 t), the highest annual demand level in our records,
Silver Industrial Fabrication
150 World Industrial Production (RHS) 10 overtaking the previous record high in 2013. Meanwhile,
8 ETP investment recorded outflows, declining by 17.7 Moz
100
6 (549 t) over the course of the year and finishing the year at
50
4 617.8 Moz (19,217 t).
Annual % Change
Volume Change

0 0 Silver coin fabrication rebounded in 2015, rising by 24%,

-2 following an 8% decline in 2014, to bring total coins and
-50
-4 medals fabrication to 134.1 Moz (4,172 t), the highest
-6
-100 level in our records. Purchases were driven by silver price
-8
weakness in the second half of the year, with third quarter
-150 -10
2006 2008 2010 2012 2014
purchases recording a historical all time high.
Source: GFMS, Thomson Reuters; Oxford Economics

11
 WORLD SILVER SURVEY 2016

2. SILVER PRICES
• The LBMA silver price averaged $15.68/oz in 2015, a 17.8% quarter certainly did not help either. These factors resulted
decline year-on-year and its lowest annual average level in a resurgence of investor interest in gold and silver amid
since 2009. Prices traded in the $13.71/oz-$18.23/oz range, forecasts of weak global growth and fears that the ECB
beginning the year at $15.97/oz and ending it at $13.82/oz. would not be able to revive the Eurozone economy. Silver
prices closed January 23rd at $18.23/oz, its highest in 2015.
• Despite the price volatility, silver prices at the end of the While silver softened when concerns over the Eurozone
first half of 2015 were barely changed from the start of the economy began to ease, silver prices still managed to
year, recording a less than 2% decline. However, as the remain above the $16/oz level for most of the first half of
expectation increased that the Fed would raise interest 2015.
rates by the end of the year, silver prices fell 12% in the
second half. Silver prices began to trend lower in the latter half of June
and this decline accelerated in the third quarter, when silver
At the beginning of 2015, silver prices were being aided by dropped 6.7% during the period and closed at $14.65/oz at
gold strength, when gold rose above $1,300/oz. Investors period-end. The managed money position on COMEX silver
SILVER PRICES

sought gold and other safe haven assets ahead of the futures and options turned into a net short towards the end
expected stimulus by the European Central Bank (ECB). of June and remained so until the second week of August,
Silver rose as much as 14.2% in the first three weeks of the the first time the position had been net short since the end
year as the euro fell to an 11-year low against the dollar and of September 2014. Markets began to speculate about
the Swiss central bank abandoned the franc’s peg against whether a rise in interest rates by the U.S. Federal Reserve
the single-market currency. The renewed flaring up of (Fed) could be imminent, in conjunction with turmoil
the Greek debt crisis following the election of the SYRIZA in emerging markets, causing weakness across various
party also fueled market concerns. Weaker than expected investment sectors. Further disappointing economic figures
economic conditions in the United States during the first from China also cast a pall over commodities. However,

US$ SILVER PRICE THE SILVER PRICE IN OTHER CURRENCIES IN 2015

1985 1995 2005 2015 Euro/kg Rupee/kg Yen/10g Yuan/kg

Annual Average 6.13 5.20 7.31 15.68 Annual Average 454.19 36,501 609.9 3,166
Maximum 6.75 6.04 9.23 18.23 Maximum 522.98 40,560 690.8 3,650
Minimum 5.45 4.42 6.39 13.71 Minimum 401.00 33,200 533.4 2,850
Range:Average 21.2% 31.2% 38.8% 28.8% Range:Average 27% 20% 26% 25%
Source: LBMA; GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

THE SILVER PRICE AND THE U.S. DOLLAR MONTHLY REAL SILVER PRICES ($2015)

35 1.6 120
Spot Price 1980 Average: $56.45
US$/Euro 1.5 100
30
1.4
Constant 2015 US$/oz

80
25
US$:Euro

1.3
US$/oz

60
1.2
20
40
1.1
1970-2015 Average:
15 $15.75
1.0 20

10 0.9 0
Jan-13 Jul Jan-14 Jul Jan-15 Jul Jan-16 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Source: Thomson Reuters Eikon Source: Thomson Reuters Eikon; GFMS, Thomson Reuters

12
 LONDON SILVER MARKET: SPOT PRICE

20 20
1 US$/oz; other currencies indexed to January 2nd 2015
10
8
3 19
19
6 9

18 18
16
12

17 5 14 17
19
18
US$/oz

US$/oz
16 2 11 16

15 15
7
Rupee
US$/oz
Euro 20 14
14 17
13 15
News leads to support for silver prices
News leads to pressure for silver prices
13 13
Jan-15 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-16 Feb Mar Apr

1 (01/12/15): Chinese funds 6 (03/18/15): Slow Chinese 10 (05/19/15): ECB announces it 14 (08/25/15): U.S. consumer 18 (12/16/15): Fed raises rates for
aggressive short-selling demand recovery after Lunar may accelerate its euro bond confidence hits 7-month high; the first time since 2006.
New Year and dollar strength buying-program; euro tumbles. China cuts rates.
2 (01/15/15): SNB abandons cap 19 (12/22/15): U.S. Q3 GDP
on the franc. 7 (03/18/15): Fed signals cautious 11 (05/25/15): Greek worries over 15 (10/12/15): Glencore production grows at 2.0%
outlook for U.S. economy a possible default spread; talks cuts and asset sales
3 (01/29/15): Fed confirms rate 20
with lenders contnue. 16
(02/11/2016): Tighter credit
hike plans for 2015 8 (04/22/15): Strong U.S. housing (11/10/15): Short-selling by markets and uncertainty over
data; fears over a June rate hike 12 (07/07/15): Greek debt crisis Chinese funds amid weak
4 (02/05/15): PBOC cuts RMB loom. Tensions in Yemen ease. Chinese economic growth worry
and Chinese equity market Chinese credit data investors; gold, silver, bonds
deposit reserve ratio losses
9 (04/23/15): Weak Chinese 17 (11/13/15): Terrorist attack in and Japanese yen rise in
5 (03/06/15): Upbeat U.S. NFP manufacturing data 13 (08/10/15): China rattles market Paris, ISIS claims responsibility. tandem.
data fuels speculation of an with surprise yuan devaluation
early rate rise
WORLD SILVER SURVEY 2016

Source: GFMS, Thomson Reuters

13
SILVER PRICES
 WORLD SILVER SURVEY 2016

VOLATILITY (US$ PRICE)

the non-event that was September’s Fed meeting, with the
2012 2013 2014 2015
Fed also showing worries about the global economy and
Annual 29% 32% 22% 24%
financial market volatility, did provide some price support
15.Q1 15.Q2 15.Q3 15.Q4
for silver. Quarterly 27% 21% 24% 24%
Source: GFMS, Thomson Reuters
After the Fed’s September meeting, silver prices rebounded
somewhat in October, not only climbing back above the
$15/oz level, but also beyond the $16/oz level on some Silver price volatility inched marginally higher, to 24.1%,
days. Markets began to speculate as to whether the Fed in 2015, from 22% the previous year although volatility
would raise interest rates at all in 2015, given that the Fed, remained well below that seen in 2011, when the annual
at that stage, seemed to have placed heavier weight on rate reached 61%. Monthly price volatility ranged from a
developments abroad on its monetary policy decision. high of 32.7% in January to a low of 13.1% in June.

However, the hawkish FOMC statement in October caught CHINESE SILVER PREMIA
the market by surprise, as the Fed removed warnings
about global economic and financial developments that All the silver prices quoted on the domestic futures
SILVER PRICES

might hold back the U.S. economic recovery and put exchanges in China are inclusive of a 17% Value Added Tax
downward pressure on inflation in the near term. This sent (VAT). While fabricators, after adding value to the silver, can
signals to the market that a rate rise was possible during usually recoup most of the VAT paid from their downstream
the last meeting of the year. Following the statement, partners, this tax is eventually paid by the consumers.
the U.S. dollar strengthened and was trading at near
three‑month highs. Precious metals came under renewed Silver prices quoted on the Shanghai Gold Exchange
selling pressure, with silver down 5% from the previous (SGE) dropped 6.9% in Chinese yuan terms last year,
trading session’s high. While the managed money position which compares to the 17.8% drop in U.S. dollar prices.
in gold turned net short in late November and remained so Benefited by the official depreciation of the Chinese yuan
for the rest of 2015, the net position in silver remained long. in August, Chinese silver premia (including the 17% VAT)
The Fed announced a quarter-point increase in the target increased slightly from $1.12/oz in 2014 to $1.23/oz in 2015,
range for the federal funds rate during its last meeting of despite weaker demand overall due to worsening domestic
the year on December 16th; silver prices rebounded initially economic conditions, especially towards the end of the
after the announcement, but further consolidation followed year. Silver inventories at the Shanghai Futures Exchange
and it closed the year at $13.82/oz. (SHFE) increased from 3.8 Moz (119 t) at the end of 2014

COMEX LONG AND SHORT MANAGED MONEY POSITIONS DAILY SILVER PRICE VOLATILITY

80 19 120
Silver Price
Long positions
60
Net Positions (contracts, thousands)

18 100

40
17 80
Volatility (%)

20
US$/oz

16 60
0
15 40
-20

-40 14 20
Short positions

-60 13 0
Jan-15 Mar May Jul Sep Nov Jan-16 Mar 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: CFTC Source: GFMS, Thomson Reuters

14
 WORLD SILVER SURVEY 2016

to 19.2 Moz (596 t) a year later, while inventories at the continued to expand their quantitative easing programs
SGE increased from 3.3 Moz (103 t) to slightly less than or made further interest rates cuts in 2015. The U.S. dollar
16.1 Moz (500 t) during the same time frame. The total index, which weights the strength of the dollar against
increase of 28 Moz (871 t) inventories at both exchanges other currencies, started the year at 90.3, and ended the
reflected the sluggishness of the Chinese economy. year at 98.6, recording a 9.3% appreciation during the year.

The average silver premia on the SGE have shrunk to GOLD:SILVER RATIO
$0.95/oz for the first quarter of 2016, which we believe is
coupled with the continual soft demand for silver from the The gold:silver ratio began 2015 at 74.1, traded between
domestic market, and the yuan showing strength since 70 and 78.9 throughout the year, and ended the year at
mid-February. After further depreciation of the Chinese 76.8. That makes the ratio average 74.0 for the full year,
currency in January (trading as high as 6.59 against the a 10.9% increase from the 2014 average. While at first
dollar on January 7th), the Chinese currency appreciated glance many would have thought that last year it was the
over 1% (6.49 against the dollar) by the end of the first Fed’s interest rate timetable that had dictated the pricing
business day after the one-week long Spring festival of commodities, in reality the ratio is telling us more, as
holiday. Further dollar weakness in late March after the the commodities market was signaling a global slowdown.

SILVER PRICES
dovish statement made by the Fed propelled the yuan even Throughout history, the gold:silver ratio has tended to be
higher. However, the long term trend of yuan depreciation very high during certain periods of time encompassing
remains intact unless the Chinese economy dramatically major wars, economic recessions or market panics.
improves. Chinese silver premia could possibly regain the
levels seen in the last two years once the pace of the yuan The signal was stronger in the second half of 2015, when
depreciation picks up again. the gold:silver ratio averaged 75.1, compared to 72.9 in
the first half. Concerns over global market slowdown, as
SILVER IN OTHER CURRENCIES evidenced by the weakening Chinese economy and other
emerging markets, ensured that the ratio continued on
While silver prices fell 13.5% in U.S. dollar terms last year, an upward trend. In fact, the ratio exceeded 80.0 for quite
basis intraperiod, prices fell 3.6% and 13.0% in euro and some time during the first quarter of 2016, in conjunction
in yen terms respectively. Meanwhile, silver prices in India with meltdown in the global equities market. By the middle
dropped 8.4% in domestic terms. of March, however, as strong rebounds in global equities
were seen across the board, the ratio retreated back below
All these were reflections of a stronger dollar last year, with 80 for a brief period of time. The ratio was hovering around
the market spending most of the time speculating on the 80 by the end of March.
Fed’s interest rate timetable, while other major economies

SGE SILVER PREMIA THE GOLD / SILVER PRICE RATIO

2.0 16 100

1.8 Premium LHS (US$/oz)

14
Premium RHS (%)
1.6
12 80
1.4
10
1.2
US$/oz

1970-2015
1.0 8 60 Average: 55.4
%

0.8
6
0.6
4 40
0.4
2
0.2

0.0 0 20
Jan-15 Mar Jun Sep Jan-16 Mar 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Source: Shanghai Gold Exchange; GFMS, Thomson Reuters Source: Thomson Reuters Eikon

15
 WORLD SILVER SURVEY 2016

CORRELATIONS OF CHANGES IN DAILY PRICES

SILVER AND OTHER COMMODITY PRICES
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
The analysis of correlation coefficients provides information Gold 0.87 0.70 0.62 0.95 0.93
about prevailing underlying themes influencing prices. It must US$ Index -0.35 -0.05 -0.05 -0.75 -0.85
be noted, however, that the existence of either a positive or Oil (WTI) -0.16 -0.08 0.32 0.84 0.42
inverse correlation between two assets is not sufficient in itself CRB Spot Metals 0.42 0.50 0.25 0.85 0.85
to establish direct causality. GSCI -0.42 0.08 0.44 0.84 0.64
Copper -0.48 0.59 0.39 0.92 0.74
As expected, silver’s strongest sustained relationship S&P 500 -0.30 0.29 0.27 -0.13 0.41
remained with gold over the course of 2015 and the first Source: GFMS, Thomson Reuters

quarter of 2016. During the first quarter of 2015, both gold

and silver behaved like safe haven assets amid market
uncertainties regarding the future of the Eurozone and weaker commodities came under renewed selling pressure. Silver’s
than expected economic figures from the United States. The strong correlation with other commodities during the final
risk averse market sentiment had many other commodities, quarter, and the strong negative correlation with the dollar
including base metals and oil, suffering from set-backs during index, suggested that commodity prices were weighed down
SILVER PRICES

the time period. As a result, silver had negative correlations by the Fed’s rate hike decision.
with most of these assets during the first quarter..
As 2016 started, disappointing December economic data
Silver, along with most commodities and equities markets, from the United States, coupled with meltdowns in global
began to show weakness in mid-May. The weakness was equity markets, sent the financial markets back into panic
attributed to the meltdown of the Chinese equities market, mode. Once again, gold and silver behaved like safe haven
which sent shock waves across the investment sector. Silver’s assets. While equity markets and certain commodities began
correlation with copper increased during the quarter, as both to rebound in February and March, gold and silver still
are considered as industrial metals, and under heavy influence managed to hold at elevated levels. The market expectation
of the Chinese economic activities. Silver’s correlation with oil for the interest rate path in the United States was adjusted
remained in negative territory however, as the oil price posted in March from four rate hikes to two, which sent the dollar
a 25% quarterly gain. index downward. Strong rebounds developed across various
commodities on a weakened dollar. The Fed’s interest rate
The hawkish October FOMC statement caught the market by timetable may continue to influence price trends heavily
surprise. Following the statement, the dollar strengthened across various asset classes throughout 2016, including silver.
and was trading at near three-month highs. Silver and other

QUARTERLY CORRELATION OF THE SILVER PRICE GOLD & SILVER PRICES & S&P INDEX

1.5 130
Gold S&P 500
Copper Gold
Silver
Index (2nd January 2015=100)

1.0 115
Correlation Coefficient

0.5 100

0.0 85

-0.5 70
Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 Q1-16 Jan-15 Apr Jul Oct Jan-16 Mar

Source: Thomson Reuters Eikon; GFMS, Thomson Reuters Source: Thomson Reuters Eikon

16
 WORLD SILVER SURVEY 2016

EQUITY, FIXED INCOME, & SILVER PERFORMANCE IN 2015

3. INVESTMENT
S&P 500 Index
120
• Identifiable Investment, which includes physical bar U.S. 10y Gov’t Bond Yield

Index (January 2nd 2015 = 100)

Silver
investment, coins and medals and changes to ETP
110
holdings, rose 16% to a near record high of 274.7 Moz
(8,543 t) in 2015. 100

• Coin and bar investment hit a record high of 292.3 Moz 90

(9,092 t), up 24%, while investors sold a net 17.7 Moz
(549 t) from ETP holdings. 80

• In 2015, annual identifiable investment fell by 5% to an 70

Jan-15 Apr Jul Oct Jan-16 Apr
estimated $4.3 billion, a much smaller decline compared to
Source: Thomson Reuters Eikon
2013 and 2014 of 13% and 22%, respectively.

OVERVIEW
prices, but growth catapulted as mints ran out of coin
Identifiable investment, which consists of physical bar inventories and could not produce enough coins to meet
investment, coins & medals purchases, and additions the pace of demand throughout the second half of the
or drawdowns to ETP holdings, increased to 274.7 Moz year. The U.S. Mint announced a halt in sales in July and for
(8,543 t) last year, up 16% from the previous year. This was several weeks thereafter mints were extending lead times
the highest level of identifiable investment since 2008 and for delivery, adding production shifts to their operations,
the strongest annual rise since 2010. This increase was and placing sales on allocation. The shortage in official
despite a reduction in ETP holdings, which fell for the first coin supply in the period between July and September was
time on an annual basis since 2011. unprecedented and systemic across the minting industry.

Coin and bar investment hit a record high of 292.3 Moz Bar purchases rose at a slightly stronger pace of 24% to
(9,092 t) last year, up 24% from the previous year. Coin total 158.2 Moz (4,920 t), also a record high. Growth in bar

INVESTMENT
purchases increased 24% and totaled a record high of sales piggybacked off strong demand for coins. Because
134.1 Moz (4,172 t). Coin demand rose strongly in all regions, coin demand could not be satiated, investors turned to
with North America accounting for 31% of growth, Asia for other silver bullion investment products such as small bars
28%, Europe for 23%, and Oceania for 17%. Strong growth and “rounds,” which are coins produced by private mints.
was initially driven by bargain buying amid relatively low Rounds typically have low premia similar to bars. It should

WORLD IDENTIFIABLE INVESTMENT WORLD IDENTIFIABLE INVESTMENT

(million ounces) 2013 2014 2015 ETP Inventory Build

Coins & Medals Real Silver Price
300 50
Physical Bar Investment 125.3 128.1 158.2
Physical
Coins & Medals 116.9 108.0 134.1 250 Bar
40
ETP Inventory Build 2.5 1.5 -17.7
200
Constant 2015 US$/oz

Total Identifiable Investment* 244.6 237.6 274.7

Million ounces

Indicative Value US$(bn)** 5.8 4.5 4.3 30

150
* Identifiable Investment is the sum of investment in physical bars,
100
coins & medals as well as the build in ETP holdings and hence is all 20
the quantifiable forms of investment.
50
** Indicative Value calculated on an annual basis 10
using annual average silver prices. 0
Source: GFMS, Thomson Reuters
-50 0
2005 2007 2009 2011 2013 2015
Source: GFMS, Thomson Reuters

17
 WORLD SILVER SURVEY 2016

be noted that North American bar demand was revised into negative territory in late June through the beginning
upward due to incredible demand growth for this product of August. This bearish activity coincided with a large drop
in recent years. The scale of revision was considerable, from in Chinese equity values. The CSI 300 Index, comprised of
10.8 Moz (337 t) to 42.2 Moz (1,314 t) in 2014. Rounds have stocks traded on Shanghai and Shenzhen stock exchanges,
been increasingly popular because the demand for coins surged 47% from the beginning of the year to a peak of
has been chronically exceeding supply in the region. The 5,354 on June 8th and collapsed thereafter. By the end of
commissioning of new private minting operations has given June, the index had dropped 16% from its peak. The index
way to an easing of this bottleneck. hit its lowest point of the year of 3,026 on August 26th,
down 44% from the peak in June. The index ended the year
In contrast to strong demand for physical coins and bars, at 3,731, up 2.5% from the beginning of the year, having
investors in ETPs reduced holdings by 17.7 Moz (549 t) recovered from its August lows.
last year. This selloff was the first drop in holdings of silver
ETPs since 2011 when investors offloaded 24.0 Moz (747 t). While COMEX silver managed money positions fell
However, ETP holdings totaled 617.8 Moz (19,217 t) by into negative territory, physical purchases accelerated
year-end, which was equivalent to about 70% of annual considerably in the third quarter. The GFMS coin survey
mine supply. Additionally, CFTC data suggest that money shows that silver bullion coin sales surged 95% in that
managers went net short COMEX silver futures and options quarter, the strongest annual rise since the first quarter of
last year for a period of seven weeks in the third quarter. 2009 when quarterly sales rose 193% year-on-year. Strong
growth could also be implied by the increase in the premia
As is usually the case, the contrast between physical paid for coins over spot, which increased approximately
purchases and futures and options activity implies 51% on average between the end of June and the end
that investments in the physical market last year were of September. Coin premia are typically composed of
dominated by longer term buyers, who saw relatively low fabrication and sales cost charges. Premia tend to increase
prices as an attractive entry point. Meanwhile, trading in periods of limited supplies and/or excess demand. In the
activity on exchanges was dictated by shorter term third quarter of the year, much of the increase in premia
responses to weakening market conditions. The declines was a combination of both of these factors.
in net long money manager positions in COMEX futures
and options largely were anticipatory on the back of a In the first quarter of 2016, silver investment demand
INVESTMENT

looming rate rise by the Federal Reserve U.S. Ahead of the continued to grow. Investors pivoted towards safe haven
Federal Reserve’s September meeting, investors began to assets in the first quarter amid renewed worries about
price a rate rise into metals prices. Another major factor emerging economy growth, particularly China. Silver prices
weighing on investor interest during the third quarter was rose 15.2% from the beginning of the year to a recent high
the equity crash in China. Money manager positions fell of $16.13/oz on April 14th. This rise was supported by much
more favorable managed money speculative length and
US AND CHINESE EQUITY INDICES renewed buying among ETP investors. Managed money
net long positions in COMEX futures and options rose to
2,200 6,000 a recent high of 262.0 Moz (8,051 t) at the end of March,
S&P 500 Index
CSI 300 Index (RHS) which was up from a previous low of 8.2 Moz (254 t) in the
2,000
second half of December. ETP holdings rose by 22.1 Moz
1,800 4,000
(689 t) in the first three months of this year and totaled
640.0 Moz (19,905 t) by the end of the quarter. This was the
1,600 highest quarter-end level since the third quarter of 2014.

1,400 2,000
OTC MARKET
1,200
Due to the lack of meaningful publicly available data
1,000 0
Jan-13 Jul Jan-14 Jul Jan-15 Jul Jan-16
on activity in Over the Counter (OTC) products in silver,
Source: Thomson Reuters Eikon
stemming from the absence of actual statistics on volumes

18
 WORLD SILVER SURVEY 2016

LONDON BULLION MARKET ASSOCIATION AND COMEX TURNOVER

LBMA COMEX LBMA/

transfers was up by 1% year-on-year, while the price decline
No. of Turnover Turnover COMEX meant that the value decline dropped by almost 17%. One
(daily averages) Transfers Moz Moz Ratio key factor underpinning interest was Asian buying but it
2009 340 97.3 159 0.6:1 should be noted that this area of the market, while growing,
2010 381 87.3 254 0.3:1 is more limited than that region’s share of overall demand.
2011 798 173.7 389 0.4:1
2012 811 134.5 264 0.5:1
EXCHANGE TRADED PRODUCTS
2013 872 136.5 287 0.5:1
2014 778 144.4 272 0.5:1
Total holdings of silver exchange traded products (ETPs)
2015 681 145.9 267 0.5:1
declined 3%, or 17.7 Moz (549 t), from year-end 2014,
Source: LBMA; COMEX
closing the year at 617.8 Moz (19,183 t). In value terms, total
holdings declined to $8.5 Bn, a fall of 15% year-on-year.
and open interest, we cannot give a precise estimate of The fall in the value of these products was slightly greater
the impact of OTC activity on the underlying physical than the decline in the silver price, which dropped by
market. Although the clearing statistics from the London $2.15/oz, or 14% to just below $14/oz at the end of 2015.
Bullion Market Association (LBMA) provide a gauge, these
data are, by definition, an imperfect reflection of investor For silver ETPs, the biggest outflow over the year took place
activity. First, they do not capture the trends in other OTC in the established entities. iShare Silver Trust, the largest
markets and secondly, they do not differentiate between silver ETP accounting for half of holdings, recorded a drop
pure investment flows and other forms of activity, because of 10.7 Moz (332 t). The second largest loss was seen in
they also capture other physical market movements. We ZKB, which registered outflows of 8.0 Moz (249 t), dropping
therefore also use information collected through field by more than 10% year-on-year. In contrast, ETF Securities
research, which, in 2015, suggested that the OTC market (LSE) ended the year at 41.2 Moz (1,281t), reporting a rise of
experienced modest buying from investors on a net basis. 4.6 Moz (143 t) or 12% increase year-on-year, which was the
only major silver ETP that posted an annual gain.
This result may come as something of a surprise to some
given the significant price drop last year, but this proved In 2015, silver ETPs saw only three months that registered
to be something of a double edged sword for investor inflows: 6.4 Moz (199 t) in February, 7.7 Moz (239 t) in June

INVESTMENT
activity. On the one hand, it discouraged some investors and 1.1 Moz (34 t) in July. In the first half of 2015, the strong
who were worried about the level of industrial usage as the inflows in February and June offset most of the outflows
Chinese economy slowed, but at the same time it sparked in other months. In the second half, the period when the
others into bargain hunting as silver hit multi-year lows. silver market was largely influenced by the likelihood of
In particular, these lower prices encouraged those who U.S. interest rate increases, holdings of silver ETPs dropped
did invest to buy a greater quantity of silver as the same by 17.1 Moz (532 t), making up approximately 97% of the
dollar expenditure would lead to higher volumes being total outflows over the year. However, the 3% drop during
bought. This change was highlighted by LBMA data, which the second half of 2015 compared to a 8% decrease in
suggested that the average size of transfers increased total gold holdings over the same time frame, owing to
by 15%, to the highest annual average since the investor differing investor demographics (gold is dominated by
frenzy of 2011. Indeed this trend appears to be continuing institutional investors while silver is typically driven by more
into 2016, as data for January and February shows that the retail activity) and being less sensitive to the U.S. economic
average size has risen a further five percent, which is the performance than gold. Furthermore, strong physical
strongest start to a year since 2010. demand in the United States, Australia and India last year,
though failing to reverse the downtrend of silver prices,
This increase in the average level of investor activity likely alleviated some of the downward pressure on silver
overstates the overall level of OTC activity last year, which ETPs. The U.S. Mint exhausted its remaining inventory
was up but much more modestly. LBMA clearing statistics of the 2015 American Eagle silver coins in the middle of
show the number of transfers dropped to their lowest level December with 47 million coins sold for 2015, 7% higher
since the post financial crisis level of 2010. The volume of than the previous year. India, the biggest buyer of silver,

19
 WORLD SILVER SURVEY 2016

INVESTMENT IN COMMODITIES create a price impact either. Combining this with waning appetite
for commodities from China, the world’s largest commodity
Last year was a disastrous one for commodities as an asset class. consumer, these factors did not bode well for commodities as an
Of the 18 commodities we track most closely, every single one of asset class and prices languished as a result.
them was in the red when it comes to year-to-date price returns.
This is a mirror image of the “supercycle” boom of 2010, when Grouping these individual commodities by similar categories
almost every commodity in the basket saw gains across the year. on an equally weighted basis, energy was the worst performing
commodity sector in 2015, shedding 31% over the year, after what
U.S. Government bonds came in as the top performer despite the seemed to be a promising start. This was followed by metals,
year-long wait for the first interest rate rise in almost a decade. which fell by 25% on average, dragged down by lackluster
Weak inflationary pressures, as a result of a strong dollar and economic activity in China and the anticipation of the U.S. rate
plunging commodity prices globally were key drivers behind rise. Speculative sentiment, as measured by net managed money
this year’s bond rally, and the Fed’s affirmation of gradual positions reported by the CFTC, was visibly bearish in 2015 for
normalization limited losses in long-term Treasuries. The dollar crude oil, natural gas and PGMs. Managed gold positions also
index also performed strongly across the year, fueled by rhetoric saw the first net short position since CFTC began to introduce
around interest rate hikes. managed money as a specification in 2006. These bearish
positions definitely lent downward pressure to prices during the
In contrast, all key commodities in the metals, energy and second half of the year. Amid increased uncertainty in China and
agriculture complex suffered losses over 2015, with the emerging markets economic outlook, average price volatility was
magnitude of average year-to-date losses (-23.8%) almost four also much higher compared to 2014, especially in the energy
times that of average gains (+6.6%). In a year characterized by complex.
anticipation of the Fed’s first interest rate rise and diverging
monetary policies between the U.S. Fed and other key The weak price performance across all commodities inevitably
Central Banks, the U.S. dollar index has in the past two years led to a decline in key commodity indices and funds. According
experienced the strongest rate of appreciation in a decade. to Lipper, an estimated total of US$1.85 bn of fund outflows
Fears of capital outflows from emerging countries further occurred in general commodity funds in 2015 in the United
exacerbated the weakening of emerging market currencies, many States alone, and a further US$123 mn of outflows took place
of which were key commodity producers such as South Africa, in precious metals equity funds. That said, they estimate
INVESTMENT

Indonesia and South American countries. Alongside plunging a small net inflow of US$40 mn entering energy related
energy prices and the reining in of costs amongst miners, this funds last year. The production‑weighted, energy heavy, S&P
resulted in cost curve deflation. In some commodity markets GSCI Index fell by 24.6% in 2015, while the liquidity-driven
characterized by supply overhangs such as iron ore, nickel and Bloomberg Commodity Index fell by 25.7% over the same
aluminium, production cuts were not meaningful enough to period. Meanwhile, the Thomson Reuters CRB Index fell by

CFTC INDEX INVESTMENT DATA (US$BN) NET POSITIONS IN KEY COMMODITY FUTURES

Livestock
300 50 Agriculture
3-month Moving Average
Energy
40 Copper
Precious Metals
200 30
US$ Billions

S bn

20
US$

100 10

0
-10
0 -10
2012 2013 2014 2015 2016
Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16
Source: GFMS, Thomson Reuters
Source: CTFC

20
 WORLD SILVER SURVEY 2016

INDEXED PERFORMANCE ACROSS ASSETS IN 2015 (JANUARY 5 2015 = 100)

24.2%. This would undoubtedly affect the
performance of the many ETPs tracking 50 60 70 80 90 100 110 120
against these benchmarks. As part of GSCI US 10 Year Benchmark
S&P annual rebalancing exercise for 2016, Dollar Index

the Investment Support Level, a reflection of Shanghai Stock Exchange Composite

S&P 500
the general level of investment in the S&P
Dow Jones Industrial Average
GSCI and related commodity indices that
MSCI International World Price Index (USD)
can be supported by liquidity in the relevant Lead
contracts, was reduced from US$220 bn to Euro

US$180 bn – a sign of waning appetite for Corn

Gold
commodities amongst investors.
Silver
Soybean
Looking to 2016, in the first six weeks of Aluminium
the year, volatile financial markets and Wheat

heightened concerns over global economic Thomson Reuters/Core Commodity CRB Index
Copper
growth in light of expansionary monetary
Natural Gas
policies, realization that the pace of U.S.
S&P Goldman Sachs Commodity Index
interest rate rises will slow, in addition to a Zinc
weakening U.S. dollar, supported safe haven Bloomberg Commodity Index

assets such as gold, while industrial metals Tin

WTI
and the general wider commodity complex
Platinum
fell. However, with equity markets recovering
Palladium
from mid-February, the commodity complex Brent
was showing signs of recovery. From the start Iron Ore
of the year up until writing, precious metals Nickel
Rhodium
and base metals are the best performing
assets while the dollar index, energy and Source: GFMS, Thomson Reuters
equities are lower year-to-date.

INVESTMENT
SILVER ETP HOLDINGS SILVER ETP HOLDINGS

Other (Moz)
800 Julius Baer 50 end-2014 end-2015
ZKB Silver Price
iShares Silver Trust 329.6 318.9
ETF Securities
Central Fund of Canada 77.0 77.0
600 40 ZKB Silver ETF 77.1 69.1
ETF Securities* 62.5 65.9
Million ounces

US$/oz

400 30
Others** 89.4 87.0
Total 635.5 617.8
* Includes LSE, Australia, NYSE, GLTR, WITE and Hong Kong
200 20
** Includes Sprott Physical Silver Trust, Julius Bär, DB Physical Silver,
iShares Silver
BlackRock Silver Bullion Trust, Silver Bullion Trust, Mitsubishi UFJ
Tokyo, iShares Physical Silver ETC, Source Physical Silver, Royal
0 10 Canadian Mint.
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Source: Respective issuers
Source: Respective Issuers
*ETF Securities: includes LSE, Australia, NYSE, GLTR and WITE
**Other: includes Sprott Physical Silver Trust, Julius Bär, DB Physical Silver,
BlackRock Silver Bullion Trust, Silver Bullion Trust, Mitsubishi UFJ Tokyo,
iShares Physical Silver ETC, Source Physical Silver, Royal Canadian Mint;

21
 WORLD SILVER SURVEY 2016

also saw a record-breaking 2015, with 256.0 Moz (7,954 t) of hoarding to benefit from lower prices or to profit from a
silver imported for the full year. differential in the spot and futures market. This short term
build up of positions eventually returns to the market as
In general, silver ETP investors, both institutional and disinvestment when the price rallies. Such disinvestment
retail who want exposure to precious metals, are not during price rallies results in local premia (the price at
as price-sensitive as those in the futures or physical which the metal is sold by a domestic trader after buying
markets. Therefore, the liquidation in silver holdings is not from importing agency) falling to a low of 2 cents and at
necessarily highly correlated with the spot price, but mostly times being forced to sell at discount, as against a lower
a reflection of medium-term prospects. In 2015, while threshold of 3 cents observed in 2014. At the retail level
the silver price experienced four major rises in January, investors preferred to accumulate one and five kilogramme
March, May and October, silver holdings saw inflows during bars in quantities higher than 2014, but these would come
February, April, June and November, often following a back for fabricating into silverware or jewelry.
price correction or clear oversold signals. However, during
the third quarter of 2015, ETP holdings showed a much Physical bar investment in the United States was revised
stronger correlation with spot prices, mostly due to the to include demand for an investment product, previously
expectation of a U.S. interest rate rise later in the year. The not being captured in our estimates, called “rounds“.
hawkish stance that the Federal Open Market Committee Growth in demand for silver rounds has been tremendous
(FOMC) delivered in the third quarter, not only had an in recent years for two reasons: a large portion of these
impact on spot prices, but also added pessimistic sentiment rounds are produced at minting operations attached to
to the market in terms of medium-term strategies. COMEX approved refiners, which enhances their liquidity
value, and new minting operations were commissioned,
Turning to 2016, silver ETP holdings surged by 31.0 expanding minting capacity in the market where demand
Moz (966 t) in March (this represented an increase of had been chronically exceeding supply. Demand for silver
US$861 mn in value terms), to total 639.0 Moz (19,871 t) rounds is somewhat new to the market in terms of its
at the end of the month. Mario Draghi, the ECB President, magnitude and level of liquidity. As a result, physical bar
indicated that he did not expect to push rates deeper into demand in the United States for 2014 has been revised
negative territory on March 11th. His comments on rates upward by 30.5 Moz (948 t), to a total of 41.3 Moz (1,285 t).
triggered a surge in the euro and a consequent fall in the Demand rose to 51.8 Moz (1,611 t) in 2015, a 25% increase
INVESTMENT

dollar, pushing the silver price higher in dollar terms. After over the previous year. Much of the growth was caused
the following week, the FOMC scaled down its estimates by a shortage of American Eagle and Maple Leaf coins.
for the number of hikes in policy rates to two from the four Insatiable demand for these coins spilled over into lower
previously touted, which also boosted investor sentiment premia silver bullion products such as bars and rounds.
toward silver.

PHYSICAL BAR INVESTMENT PHYSICAL BAR INVESTMENT

Global physical bar investment rose to a record 158.2 Moz 180 India
(4,920 t) in 2015, a 24% surge from the previous year. 160 North America
140 Europe
The declining silver price drove bargain buying higher,
120 China
particularly in India and the United States, where bar Other
100
Million Ounces

consumption rose 31% and 25%, respectively. Strong

80
demand for official coins and corresponding shortfalls of 60
coin supply also boosted bar demand, as investors sought an 40
alternative to satiate investment demand. 20
0

Indian physical bar investment increased by 31% to -20

-40
82.5 Moz (2,567 t), the highest since 2008. In India, a large 2008 2009 2010 2011 2012 2013 2014 2015
part of physical bar investment comes from short term Source: GFMS, Thomson Reuters

22
 WORLD SILVER SURVEY 2016

SILVER TURNOVER ON MAJOR COMMODITY EXCHANGES

Physical bar investment in Europe rose by 16% to 12.7 Moz (total volume in nominal million ounce equivalents)
(396 t) last year driven by robust uptake in various Change
2013 2014 2015 y-o-y
countries. This is a welcome development following
SHFE 82,971 93,296 70,176 -25%
the prolonged downtrend since the peak in 2010. The
COMEX 72,375 69,485 67,272 -2%
improvement can be attributed to the generally more
MCX 15,676 7,750 7,705 -1%
upbeat sentiment toward the precious metals complex. Tax
SGE 6,881 8,024 12,935 61%
free gold physical bar investment is often the first choice
ICE FUTURES US 500 188 135 -29%
among European investors. However, some investors have TOCOM 31 28 20 -27%
been attracted by silver’s price correction in recent years,
*N.B. : Includes the 5,000-ounce and 1,000-ounce contracts
allocating a portion of their portfolio towards it. Purchases
Source: GFMS, Thomson Reuters; TOCOM, MCX, SGE and SHFE
of such kind are usually for the buy and hold strategies by
investors able to stomach strong volatility. Silver remains
heavily taxed by the majority of countries in Europe, barring 2015, with an average daily turnover of 151.4 Moz (4,710 t),
Turkey, although there are some exemptions under the so reflecting poor sentiment and the bankruptcy of some
called “differenzbesteuerung” for material sourced outside industry members due to weak demand.
the EU and for resale purposes in Germany. It makes
investing in silver, however, a little bit more complex, which On the contrary, Shanghai Gold Exchange (SGE) continued
contributes to some investors shying away. Nevertheless, its stellar growth, with volumes increasing by 61 % year-
the improved sentiment last year proved that the prospects on-year to a nominal 12,935 Moz (402,320 t). Interestingly,
for silver physical bar investment are still very good, although total volumes were significantly lower compared
particularly when macro economic uncertainties resurface. with other major commodity exchanges, SGE was the
only exchange to post growth in 2015. Record activity was
Following a drop of 52% a year earlier, Chinese bar registered in August, with total turnover for the month at
investment fell to 3.8 Moz (118 t) in 2015, down 38% 1,653 Moz (51,401 t). This was a reflection of the much more
year‑on‑year and the lowest since 2010. The sharp decline volatile path that the silver price took over that period.
was partly attributed to market consensus that the silver Additionally, an adjustment in the deferred interest rate
price was on a downward trend. Furthermore, silver was of the Ag (T+D) contract from 0.020% to 0.018%, which
seen as a less attractive asset compared to gold, which was implemented by the exchange in November last year,

INVESTMENT
traditionally Chinese investors prioritize for physical attracted more investors and bigger trading volumes.
exposure to precious metals. The Chinese economic
slowdown also took a toll on silver physical investment, as Turnover on the Multi Commodity Exchange of India
demand for precious metals across the sector remained (MCX) more than halved in 2014 as a result of the
weak. However, while investment demand remained commodities transaction tax, which was introduced in July
sluggish for the full year, an increasing number of domestic 2013. The marginal 1 % year-on-year decrease in 2015,
investors resumed their interest in silver for collections. The to a nominal 7,705 Moz (239,648 t), might indicate that
second half of 2015 saw stellar growth in demand for silver investors have gradually adjusted to the change.
coins, especially those of a commemorative nature, which
pushed demand 80% higher than that of 2014 to 10.7 Moz Turnover on COMEX posted a modest 2% year-on-year
(331 t). decline last year, to a nominal 67,272 Moz (2,092,362 t).
While the turnover surged in August to its maximum for
COMMODITY EXCHANGES ACTIVITY the year, largely driven by increased price volatility, activity
slowed in September, with the daily average of 195.8 Moz
The year of 2015 saw total turnover on the Shanghai (6,090 t), before growing afterwards in the anticipation of
Futures Exchange (SHFE) drop by 25 % after three years of the FOMC decision on rate cut.
stable growth, to a nominal 70,176 Moz (2,182,677 t). The
exchange saw high turnover in the first quarter, sustaining CFTC reports on managed money positions can be used as
the growth seen in the second half of 2014. However, a proxy for investor activity on the exchange. The first half
activity fell to its lowest on record in the final quarter of of 2015 was characterized by a steady rise in long positions

23
 WORLD SILVER SURVEY 2016

NET MONEY MANAGER POSITIONS ON COMEX MANAGED MONEY NET POSITIONS IN COMEX FUTURES

Contracts Moz Price

60 24 2012 19,345 96.7 31.15
50 2013 9,444 47.2 23.79
Net positions (contracts, thousands)

22

Comex Settlement Price (US$/oz)

2014 9,613 48.1 19.08
40
20
2015 Q1 26,052 130.3 16.71
30
Q2 18,865 94.3 16.39
20 18 Q3 1,687 8.4 14.91

10
Q4 22,650 113.3 14.77
16
(Managed Money net positions, Moz equivalent and average COMEX
0
settlement price in $/oz)
14 Source: CFTC
-10

-20 12
Jan-14 Jul Jan-15 Jul Jan-16

Source: CFTC
GFMS’ proprietary quarterly bullion coin survey shows
that silver coin sales started 2015 by holding firm from
levels recorded at the end of 2014, before the introduction
and a volatile short position, mirroring the silver price. At of European VAT increases in the second quarter of
the end of June investors turned negative, leaving a net 2015 resulted in a swift contraction in sales. However,
deficit of 25.5 Moz (792 t). A continuously falling price was sales rebounded in the third quarter, soaring by an
accompanied, and partially driven by, a surge in shorts to a impressive 74% on a quarter-on-quarter basis and 95%
record high of 287 Moz (8,931 t) in July and supported the on a year‑on‑year basis to 32.9 Moz (1,023 t), the highest
sell-off trend until mid-August, when the price first rallied quarterly sales in our nine years’ worth of records, as prices
and then dropped again. For most of the fourth quarter, fell below the key psychological level of $15/oz. Unlike gold
investors favored the metal largely for its industrial bullion coin sales, which ebbed and flowed with the gold
properties, supported by positive news on U.S. economic price, quarterly sales of silver bullion coins have remained
recovery, thereby bringing long positions to a record high in solid since 2010. Therefore, the upward lurch in this quarter
October to a nominal 310 Moz (9,642 t). was remarkable considering the comparatively narrow
range of silver price swings. The sales of silver coins were
ICE Futures U.S. and TOCOM posted year-on-year declines so strong that almost all the key mints had to put their
INVESTMENT

in turnover by 28% and 27% respectively. Volumes dropped silver bullion sales on allocation, with many bullion dealers
significantly on both exchanges towards year-end. Subdued indicating that lead times, which are typically immediate
trading activity across all major exchanges (with the delivery, were stretched to 3-4 weeks. In the final quarter of
exception of the SGE) is reflective of a generally negative the year, demand remained strong, with low silver prices,
sentiment towards silver and other commodities in light of volatile financial markets and general uncertainty over the
the slowdown in China.
SILVER BULLION COIN SALES
COINS AND MEDALS Silver Price
35 50

Silver coin fabrication rebounded in 2015, rising by 24%, 30

40
following an 8% decline in 2014, to bring total coins and
25
medals fabrication to 134.1 Moz (4,172 t), the highest level
Million Ounces

30
on record. Last year exceeded our previous record high 20
US$/oz

in 2013 of 117.0 Moz (3,635 t), when investors entered the 15

20
market en masse to bargain hunt following the silver price
10
collapse in Q2 2013. Prior to that period, high prices had
10
priced many potential investors out of the market, or to 5

lower volumes. In value terms, total investment in coins

0 0
and medals declined by 3% to $1.6 Bn, as the growth in Q1-10 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15

volumes was more than offset by declines in the silver price. Source: GFMS, Thomson Reuters

24
 WORLD SILVER SURVEY 2016

TABLE 2 - SILVER FABRICATION: COINS AND MEDALS (INCLUDING THE USE OF SCRAP)
(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
United States 17.6 16.0 25.4 34.3 41.7 41.0 34.8 44.2 45.5 48.6
Canada 2.9 4.3 9.0 10.8 18.6 23.5 18.0 29.7 30.7 35.8
Australia 1.4 3.5 5.9 6.5 8.8 11.3 6.5 9.1 7.9 12.3
China 1.6 2.6 2.8 3.0 1.5 4.1 4.5 6.2 5.9 10.7
India 0.0 0.0 0.0 0.0 0.0 1.9 1.9 5.4 6.3 8.9
Austria 0.5 0.5 8.3 9.5 11.6 18.4 9.2 14.7 4.8 7.5
United Kingdom 0.4 0.5 0.5 0.5 0.5 1.0 0.7 2.2 1.9 3.2
Germany 8.7 6.3 7.2 7.4 6.4 3.3 1.1 0.6 0.6 2.0
Mexico 1.9 1.6 1.4 1.7 2.1 1.7 0.7 1.1 1.0 1.0
Spain 1.5 1.2 0.6 0.6 0.6 0.5 0.4 0.4 0.5 0.5
Other Countries 3.2 3.0 3.0 3.2 4.2 3.9 7.2 3.2 2.9 3.7
World Total 39.7 39.5 64.1 77.6 95.9 110.4 85.1 116.9 108.0 134.1
© GFMS, Thomson Reuters; The Silver Institute

global economic outlook resulting in the second strongest Chinese silver coin fabrication, which by year-end totaled
quarterly sales in our recorded history. 10.7 Moz (331 t). Silver coin fabrication has increased by
more than sixfold in China in the past decade, growing from
Looking at trends on a regional basis and starting with a mere 1.6 Moz (50 t) in 2006. This has been driven by an
North America, silver fabrication in the United States and increase in interest for bullion coins as a means to store
Canada sharply increased from the previous year’s levels, wealth, with silver seen as an alternative way of getting
growing 7% and 17% respectively, with combined bullion exposure to gold as it is trades at a lower and more volatile
and numismatic coins recording 48.6 Moz (1,513 t) and price and offers a good entry point for smaller investors.
35.8 Moz (1,112 t) in 2015. In both countries, this was the Meanwhile, efforts by China Gold Coin, in promotional
highest silver coin fabrication level in our records. Mexico activities, widening distribution channels, in addition to
saw silver coin sales remain flat at 1.0 Moz (31 t). further diversifying silver coin designs in both traditional
and modern patterns, has attracted further interest for
European coin fabrication rebounded in 2015, increasing silver coins for collection purposes.
by 67% year-on-year to 15.2 Moz. Half of this growth is

INVESTMENT
attributed to Austria, Europe’s pre-eminent bullion coin Similarly, Australia, which is one of the of the key silver
manufacturer, which saw total sales rise by 56% to 7.5 Moz bullion coin producers in the world, rebounded last year,
(233 t), its highest level since 2013. Meanwhile, the UK, growing 57% to total 12.3 Moz (384 t), to record its highest
the second largest market for bullion coins in Europe, fabrication level on record. India resumed its position
saw a rise in sales of 62% to 3.2 Moz (98 t), marking the as Asia’s second largest silver coin fabricator in 2015,
highest annual UK sales on record. The rejuvenation in producing 8.9 Moz (278 t). The 43% year‑on‑year growth
demand, which prior to 2013 was always below 1.0 Moz, was attributed to increased demand from the gifting
was largely driven by weakness in silver prices in the second segment, for both corporate and personal gifting, while
half of the year; it was also partly a result of the Royal investors hoarded the coins, expecting higher prices.
Mint’s marketing campaign to revive demand for precious
metals, which began three years ago. Meanwhile, Germany, Entering 2016, volatile financial markets and a general
once (but no longer) Europe’s second largest silver coin sense of uncertainty resulted in risk averse investors looking
fabricator, saw its silver uptake soar in 2015 by 213% to to park their assets in safe havens, with North America
2.0 Moz (63 t), to its highest ever recorded level. and Australia in particular recording exceptionally strong
silver coins sales in January and February. However, by
In Asia, silver coin fabrication soared by 54% in 2015 to end-March, with the silver price having rallied by 11% from
21.1 Moz (657 t), far more than reversing the 4% decline its recent low, in addition to recovering European equity
recorded in the previous year and marking the highest markets, demand across Europe faltered, recording first
annual Asian fabrication level in our records. Much of quarter declines of 79% and 27% year-on-year in the UK
this growth was driven by an impressive 80% increase in and Austria respectively.

25
 WORLD SILVER SURVEY 2016

4. MINE SUPPLY
• Global silver mine production increased by 2% in 2015, MINE PRODUCTION
reaching a total of 886.7 Moz (27,579 t).
• Silver mine supply increased once again in 2015, led by
• The copper sector was the principal driver behind the gains in South America and Europe, with by‑product
increase, with a 7% year-on-year increase in output. silver from the copper sector seeing the largest
year‑on‑year gain.
• Regionally, the strongest gains were in South America
and Europe, with increases of 5% and 8% respectively. Global silver mine supply increased for the 13th successive
year in 2015, reaching a record high of 886.7 Moz (27,579 t),
• Primary silver co-product cash costs plus capex fell by a 2% year-on-year increase and representing a stronger
11% in 2015, to average $11.74/oz. outcome than forecast six months ago. Regionally, the
largest increase was recorded in South America, where
• The producer community added silver hedges in 2015 supply grew by 5%, or 14.4 Moz (447 t). Standout gains
of 7.8 Moz (244 t) in 2015, to leave the hedge book at in the regions were seen from Peru’s Antamina and in
end-December amounting to 38.9 Moz (1,213 t). Argentina from Cerro Negro. European mine supply gained
a substantial 8%, or 9.1 Moz (284 t), with additional primary
silver supply from Dukat, and higher by-product output
from Boliden and KGHM’s base metals operations. In terms
of production sectors, the largest increase in both volume

TOP 20 SILVER PRODUCING COUNTRIES TOP 20 SILVER PRODUCING COMPANIES

Rank Output (Moz) Rank Output (Moz)

2014 2015 Country 2014 2015 2014 2015 2014 2015
1 1 Mexico 186.3 189.5 2 1 Fresnillo plc. 1 2 40.4 43.0
2 2 Peru 122.9 135.9 1 2 KGHM Polska Miedź S.A. Group 3 40.4 41.6
3 3 China 112.5 109.1 3 3 Goldcorp Inc. 36.8 40.4
6 4 Russia 46.1 50.5 4 4 Glencore plc. 4 35.5 36.6
4 5 Australia 53.9 50.3 6 5 Polymetal International plc. 28.7 32.1
5 6 Chile 50.6 48.4 7 6 Pan American Silver Corp. 2 26.1 26.1
7 7 Bolivia 43.2 42.0 8 7 Volcan Cia. Minera S.A.A. 4 22.5 24.8
8 8 Poland 40.7 41.5 11 8 Cia. De Minas Buenaventura S.A.A. 4 19.7 22.3
9 9 United States 37.9 35.4 9 9 Corp. Nacional del Cobre de Chile 20.4 21.3
10 10 Argentina 29.1 34.7 10 10 Tahoe Resources Inc. 2 5 20.3 20.4
11 11 Guatemala 27.6 27.7 5 11 BHP Billiton plc. 5 6 34.0 19.2
12 12 Kazakhstan 19.0 17.3 12 12 Coeur Mining, Inc. 2
17.2 15.9
14 13 Sweden 12.7 15.9 14 13 Sumitomo Corp. 5 14.2 15.8
13 14 Canada 15.9 12.2 13 14 Hochschild Mining plc. 7 16.2 14.8
16 15 India 8.4 12.0 NA 15 South 32 Ltd. 5 NA 13.9
MINE SUPPLY

17 16 Indonesia 7.7 9.8 20 16 Boliden A.B. 6 10.4 13.5

15 17 Morocco 8.8 9.5 16 17 Southern Copper Corp. 8
13.0 13.3
18 18 Turkey 6.6 6.5 23 18 Hindustan Zinc Ltd. 9 8.4 12.0
19 19 Dominican Republic 4.5 4.1 19 19 Hecla Mining Company 11.1 11.6
20 20 Armenia 3.7 3.7 15 20 Industrias Peñoles S.A.B. De C.V. 10 14.1 11.5
1 Including 100% of Penmont mines, excluding silverstream; 2 Primary silver producer;
Rest of World 30.2 30.6 3 Reported metallic silver production; 4 Includes minority partners; 5 Estimate; 6 Metal in concentrate;
7 Includes 100% from Pallancata, includes Moris; 8 Mined silver; 9 Integrated refined metal;
World Total 868.3 886.7 9 Excludes 100% of Fresnillo plc.

Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

26
 WORLD SILVER SURVEY 2016

SILVER MINE PRODUCTION WINNERS AND LOSERS, 2015 VERSUS 2014

-5.0 -3.0 -1.0 -0.1 +0.1 +1.0 +3.0 +5.0 Moz

Source: GFMS, Thomson Reuters
-156 -93 -31 -3 +3 +31 +93 +156 Ton

and percentage terms came from copper mines, which NORTH AMERICA
produced an additional 12.5 Moz (388 t) of by-product silver
in 2015, a 7% increase on the previous year. The primary North American mine production fell for the first
silver and gold sectors each gained 5% last year, equivalent time in seven years, dropping by 3 Moz (93 t) to total
to annual increases of 11.7 Moz (364 t) and 6.2 Moz (192 t) 237 Moz (7,374 t). This outcome was driven by a drop in the
respectively. These gains were offset somewhat by losses lead/zinc sector in Mexico and Canada, partially offset by
from the lead-zinc mining industry, where the effects of an overall increase in production from primary silver mines.
announced supply cutbacks are beginning to manifest
themselves. Production costs for silver producers fell again Mine supply from Mexico rose by 3.2 Moz (100 t), or
in 2015. On a co-product basis, the average cash cost plus 2%, led by the primary silver and the gold sector. Higher
capex decreased by 11%, to $11.74/oz. By comparison, the production at Saucito accounted for the majority of the
Total Cash Cost on a by-product basis averaged $6.66/oz growth in the country, supported by the ramp-up at
in 2015, a 3% year-on-year decrease. The silver producer Saucito II, ahead of schedule. El Cubo reaped the benefit
hedge book expanded by 7.8 Moz (244 t) in 2015, ending of an expanded mining fleet to raise plant throughput
the year at a delta-adjusted total of 38.9 Moz (1,213 t). by 64%, accompanied by higher grades due to planned
WORLD SILVER MINE PRODUCTION mine sequencing, yielding a 1.1 Moz (33 t) increase in
output. Further gains were recorded at Parral and Avino,
Africa Asia
1,000 where aggregate output rose by 1.3 Moz (41 t) on higher
Oceania & Other Central & South America
Europe North America throughput from the commissioning of Mill Circuit 3, and
ramp-up efforts, respectively. Following the expansion
MINE SUPPLY

800
at San Jose in April 2014, throughput continued to
Million Ounces

600 rise, registering a 12% increase year-on-year, adding

0.5 Moz (17 t) over the year as a whole.
400

Providing a partial offset, development delays at Fresnillo

200 led to fewer tons of ore hoisted and caused throughput rate
to fall by 8.2%. Altogether, grades fell by 15%, causing a
0 4.5 Moz (140 t) drop in output. In addition, a 5% decrease
2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters

27
 WORLD SILVER SURVEY 2016

TABLE 3 - WORLD SILVER MINE PRODUCTION

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Russia 31.3 29.3 36.4 42.2 36.8 38.5 44.5 45.9 46.1 50.5
Poland 40.5 39.6 39.0 39.2 37.6 40.8 41.3 37.6 40.7 41.5
Sweden 8.6 9.4 8.4 8.7 9.2 9.1 9.8 10.8 12.7 15.9
Turkey 6.0 7.5 10.1 12.5 12.3 9.3 7.3 6.0 6.6 6.5
Portugal 0.6 0.9 1.3 0.7 0.7 1.0 1.1 1.4 1.7 2.4
Spain 0.1 0.1 0.1 0.1 0.7 1.1 1.2 1.3 1.3 1.3
Greece 0.8 1.1 1.1 0.9 0.9 0.8 1.0 0.9 0.9 1.0
Bulgaria 0.6 0.4 0.4 0.5 0.4 0.5 0.6 0.6 0.6 0.6
Macedonia 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4
Ireland 0.2 0.2 0.3 0.2 0.1 0.2 0.3 0.3 0.2 0.2
Romania 0.5 0.1 0.0 0.1 0.2 0.4 0.3 0.3 0.1 0.1
Finland 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1
Other Countries 0.1 0.1 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0
Total Europe 89.6 89.0 97.4 105.5 99.4 102.0 107.7 105.7 111.3 120.4
North America
Mexico 95.5 100.8 104.1 114.3 141.8 153.6 172.3 177.3 186.3 189.5
United States 36.7 40.5 36.0 40.2 41.2 36.0 34.1 33.4 37.9 35.4
Canada 31.2 26.7 21.5 19.6 18.4 18.7 22.0 20.6 15.9 12.2
Total North America 163.3 168.0 161.6 174.0 201.4 208.3 228.4 231.3 240.1 237.1
Central & South America
Peru 111.6 113.8 120.2 127.7 118.7 111.7 114.0 120.7 122.9 135.9
Chile 51.7 62.3 45.2 41.8 41.4 41.5 38.4 37.7 50.6 48.4
Bolivia 15.2 16.9 35.8 42.6 40.5 39.0 38.8 41.2 43.2 42.0
Argentina 6.9 8.2 10.8 18.0 23.3 22.8 24.5 24.9 29.1 34.7
Guatemala 1.6 2.8 3.2 4.2 6.3 8.8 6.6 9.0 27.6 27.7
Dominican Republic 0.0 0.0 0.0 0.6 0.6 0.6 0.9 2.8 4.5 4.1
Honduras 1.8 1.7 1.9 1.9 1.9 1.6 1.6 1.6 1.8 1.1
Nicaragua 0.1 0.1 0.1 0.1 0.2 0.3 0.3 0.4 0.5 0.6
Ecuador 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.6 0.6
Brazil 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Colombia 0.3 0.3 0.3 0.3 0.5 0.8 0.6 0.4 0.4 0.5
Venezuela 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1
Other Countries 0.1 0.2 0.1 0.1 0.1 0.1 0.2 0.2 0.1 0.1
Total C. & S. America 190.0 207.1 218.5 238.2 234.4 228.0 226.9 240.1 281.9 296.3
Asia
China 75.9 79.3 84.0 86.7 94.6 102.6 109.3 113.5 112.5 109.1
Kazakhstan 25.6 22.8 20.2 19.7 17.6 17.6 17.5 19.6 19.0 17.3
India 5.9 5.7 6.8 6.2 8.2 7.5 9.0 10.7 8.4 12.0
Indonesia 7.9 8.6 8.0 7.7 6.7 6.1 5.3 8.2 7.7 9.8
MINE SUPPLY

Armenia 1.3 1.7 1.4 1.3 1.6 2.4 2.9 3.4 3.7 3.7
Islamic Rep. of Iran 3.2 2.9 3.2 3.4 3.6 3.6 3.5 3.2 3.1 3.3
Mongolia 1.2 1.2 1.1 1.1 1.1 1.1 1.1 1.6 2.1 2.6
Uzbekistan 2.1 2.5 1.7 1.7 1.9 1.9 1.9 1.9 1.7 1.5
Dem. Rep. of Laos 0.2 0.1 0.2 0.5 0.6 0.6 0.6 1.0 1.3 1.3
Philippines 0.8 0.9 0.5 1.1 1.4 1.4 1.5 1.5 0.9 0.9
North Korea 0.9 0.9 0.9 0.8 0.8 0.9 0.9 0.9 0.9 0.8
Thailand 0.5 0.4 0.4 0.7 0.7 0.8 1.2 1.2 1.1 0.8
Saudi Arabia 0.3 0.3 0.4 0.4 0.4 0.3 0.3 0.6 0.7 0.7
© GFMS, Thomson Reuters / The Silver Institute

28
 WORLD SILVER SURVEY 2016

TABLE 3 - WORLD SILVER MINE PRODUCTION

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Japan 1.1 0.4 0.4 0.4 0.3 0.5 0.6 0.5 0.5 0.5
Kyrgyzstan 0.2 0.2 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.4
Tajikistan 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1
Pakistan 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other Countries 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.1 0.1 0.1
Total Asia 127.2 128.2 129.7 132.2 140.2 147.9 156.2 168.4 164.1 165.1
Africa
Morocco 7.7 7.2 8.1 8.7 10.5 8.3 8.3 9.1 8.8 9.5
Eritrea 0.0 0.0 0.0 0.0 0.0 0.1 0.7 0.8 1.5 2.3
South Africa 2.8 2.2 2.4 2.5 2.6 2.4 2.2 2.2 1.2 1.1
Zambia 0.3 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5
Burkina Faso 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4
Tanzania 0.4 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4
Botswana 0.1 0.1 0.2 0.2 0.2 0.1 0.2 0.3 0.3 0.2
Zimbabwe 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Ethiopia 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.1
Mali 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Ghana 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Dem. Rep. of Congo 2.2 2.3 1.1 0.0 0.2 0.4 0.4 2.0 0.3 0.1
Other Countries 1.1 0.3 0.3 0.0 0.0 0.1 0.1 0.1 0.1 0.0
Total Africa 15.0 13.1 12.9 12.4 14.6 12.6 13.3 15.8 13.9 14.8
Oceania & Other
Australia 55.6 60.4 61.9 52.4 60.4 55.5 55.5 59.2 53.9 50.3
Papua New Guinea 1.6 1.4 1.6 2.2 2.1 3.0 2.6 2.9 2.8 2.3
New Zealand 1.1 0.6 1.0 0.5 0.4 0.3 0.2 0.4 0.3 0.3
Other Countries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Oceania & Other 58.4 62.4 64.6 55.0 63.0 58.7 58.3 62.4 57.0 52.9
World Total 643.4 667.7 684.7 717.3 753.0 757.6 790.8 823.7 868.3 886.7
© GFMS, Thomson Reuters / The Silver Institute

in silver grades at Palmarejo led to a 1.4 Moz (44 t) drop in mining activities ceased at Wolverine early in January 2015,
output. followed by Myra Falls in April 2015. Further losses were
seen in the gold and copper sector on lower grades at
Turning to the gold sector, production at San Dimas LaRonde and the shutdown of Duck Pond mid-year.
increased by 35%, or 2.2 Moz (67 t), as a result of higher
throughput and recovered grades from the Jessica vein. The United States also experienced a reduction in silver
Higher ore grades were also posted at Cienega, where output, of 7% year-on-year, to total 35.4 Moz (1,100 t). The
production from the San Ramón satellite mine helped largest change year-on-year was registered at Bingham
add 0.8 Moz (23 t). Silver production fell from the lead/ Canyon, where lower grades and reduced throughput due
zinc sector as Campo Morado was placed on care & to the de-weighting and de-watering led to a 1.5 Moz (46 t)
MINE SUPPLY

maintenance and development work delays at Cozamin drop in output. We estimate that production at Teck’s Red
led to a shortfall in production. These losses were partially Dog dropped by approximately 0.5 Moz (17 t). The gold
offset by a marginal increase at Peñasquito on higher sector posted a loss of 1.9 Moz (60 t) which stemmed from
grades. the suspension of operations at Hycroft mid-year. Gains
were noted in the primary silver sector with an increase at
Losses in Canada extended for a third consecutive year as Greens Creek on higher grades, albeit partially offset by a
output dropped by 3.6 Moz (113 t). The contraction mainly drop at Lucky Friday due to a failure in the underground
related to lower production from the lead/zinc sector as ventilation system.

29
 WORLD SILVER SURVEY 2016

CENTRAL & SOUTH AMERICA change in the mine plan which resulted in a 50% decrease
in ore production. Although there were several production
For a third consecutive year, Central & South American losses at lead/zinc mines, the key driver was higher
mine production was the engine behind global mine supply production from Yauli, where higher throughput and grades
growth; output rose by 14.4 Moz (447 t) to a record high of from the Andaychagua deposit added 1.4 Moz (46 t) year-
296.3 Moz (9,215 t). Across the region, output growth was on-year.
led by copper and gold operations, and to a lesser extent,
primary silver mines. On an aggregate basis, the copper The second largest gain came from Argentina, where
and gold mines in the region contributed 15.2 Moz (473 t) of production rose by 5.6 Moz (174 t), stemming primarily
additional production, with losses from the lead/zinc sector from the gold sector. Having commenced in July 2014,
providing an offset of 2.6 Moz (80 t). commercial production was declared at Cerro Negro on
January 1st 2015, adding 3.9 Moz (122 t) in its first full year
The largest country increase globally was from Peru, where of operation. Casposo also recorded an increase from the
production rose by 13.0 Moz (405 t), or 11%, to a total mining and processing of higher grades from the Aztec and
135.9 Moz (4,227 t). The majority of the increase in output INCA veins. This was, however, partially offset by a 35%
came from the copper sector, which rose by 11.1 Moz (344 t), drop in silver output at Alumbrera on lower grades. In the
driven by higher throughput at Antamina and the ramp-up primary silver sector, the marginal increase in production
of operations at Toromocho. In addition, fresh supply came was primarily driven by higher output at Pirquitas, where
from Constancia, which was commissioned in December higher recoveries and a 15% jump in mined grades led to a
2014, and achieved commercial production in April 2015. 1.6 Moz (50 t) increase in production.
A full year of operations accounted for an increase of
2.0 Moz (62 t) last year. With the exception of a project Having become a significant silver mining country in 2014,
addition in the form of Inmaculada, silver production production in Guatemala showed a marginal increase
from the gold sector remained relatively steady through year-on-year. After reaching commercial production in
2015. Dóre output at Inmaculada started in June 2015, January 2014, operations at Escobal focused on increasing
and reached commercial production three months later, throughput over 2015, but accompanied by a 17% drop in
adding 2.1 Moz (64 t) to Peru’s 2015 total. Gains from head grades silver output was essentially flat year-on-year.
primary silver mines were driven by an increase in output Chilean mine supply showed a sharp contrast to 2014’s
at Uchucchacua and the Oxides Plant at Cerro de Pasco, growth, as production fell by 2.2 Moz (69 t) on the back of
which was commissioned in Q4 2014 to process silver-rich lower grades at El Peñón and Cerro Bayo which between
stockiles. Having reached full capacity in June 2015, the the two operations produced 1.6 Moz (49 t) less silver in
Oxides Plant added 2.5 Moz (77 t) last year, registering the 2015. The drop at El Peñón was weighted to the second half
second largest increase in the country. Losses at Pallancata of the year, owing to lower grades due to mine sequencing.
amounted to 2.9 Moz (89 t), a drop of 44%, following a
Further losses were recorded for Bolivia, where production
MINE PRODUCTION IN THE AMERICAS fell by 1.3 Moz (39 t), primarily led by a contraction in
output from mining co-operatives, which represent roughly
Other Argentina Chile
600 90% of the mining labor force in Bolivia. In addition, losses
Canada United States Bolivia
Mexico Peru
at San Bartolomé were witnessed as grades, recoveries and
500
throughput dropped. We estimate that production at San
MINE SUPPLY

400 Cristobal rose by approximately 1.2 Moz (39 t).

Million ounces

300

200

100

0
2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters

30
 WORLD SILVER SURVEY 2016

ASIA Kazakhstan’s production of mined silver decreased again

in 2015. Falls were noted in both the zinc and copper
Silver mine output from Asia rose last year, by 1% to sectors last year, with production from Kazzinc and from
165.1 Moz (5,136 t), following a 3% drop in 2014. The bulk Kaz Minerals’ East Region assets lower by 15% and 10%
of the reduction originated from lead and zinc production respectively. Kazakhstan has actively stepped up efforts
sources with a lesser drop from primary silver mines. The to promote its domestic precious metals refining capacity,
bulk of the loss could be traced to mines in China and treating mine doré and scrap from several international
Kazakhstan, partly offset by higher production in India, sources.
Indonesia and Mongolia.
Silver production in India showed a notable rise last year, of
Chinese mine production contracted for the second more than two-fifths, or by 3.6 Moz (113 t), to reach a record
consecutive year, to total 109.1 Moz (3,392 t), posting the production total for the country of 12.0 Moz (374 t). Higher
second largest country fall last year with a decrease of ore volumes and grade from the Sindesar Khurd mine in
3.4 Moz (106 t). The drop was driven by lower silver output the second half of the year were behind much of this gain,
from both domestic primary silver and from lead and zinc amid a period of otherwise lower output as the company’s
production. The primary silver industry contracted by more flagship Rampura Agucha transitions from open pit to
than 10%; although output from China’s largest primary underground mining. Silver production in Indonesia showed
silver mining complex, Ying was steady year-on-year, we a gain of more than one-quarter last year with a greater
estimate supply from Wuping Zijin fell to less than half its than ten-fold rise in silver output at Batu Hijau (following
2014 volume, from 2.0 Moz (62 t). In the case of the lead- depressed production in 2014) more than offsetting losses
zinc sector, both economics and environmental factors are from Grasberg, Pongkor and Toka Tindung.
behind the recorded drop, with lower base metals prices
leading to closure of smaller, higher cost lead-zinc mines. OCEANIA

Also significant to the Chinese silver industry have been Production in Oceania fell by 4.0 Moz (125 t), or 7%, owing
policy decisions implemented last year; the Ministry to lower production from several major silver-producing
of Industry and Information Technology introduced mines in Australia. This is a less severe assessment
more stringent definitions and requirements for mine than government data which pointed to a 26% drop.
development in order to raise the barrier to entry for Within the primary silver industry, losses extended for
greenfields project developers. In addition, there have a third consecutive year due to an 11% drop in grades
reportedly been growing instances of smaller, less at Cannington, causing output to fall by 2.5 Moz (77 t).
environmentally compliant mines being closed for reasons Another meaningful drop came from the Mount Carlton
such as poor tailings management. The guidelines issued gold mine, following the depletion of silver-rich A39
in 2015 stipulated that greenfields “small” lead-zinc deposit in late-2014. Over 2015, mining activities focused
mining projects must have a minimum design capacity on the medium to high gold grade zones of the V2 deposit,
of 100,000 tons per annum (tpa) of ore, with reserves to causing silver production to drop by 1.75 Moz (54 t). Proving
support a mine life of 10 years or more, and also imposed a partial offset, a restart at Manuka (formerly Wonawinta)
additional environmental planning conditions. This led an increase before Black Oak Minerals entered
compares with 2007 guidelines that stated minimum voluntary administration in late October 2015.
capacity requirements of 30,000 tpa. Of relevance
MINE SUPPLY

domestically to the downstream industry rather than the In contrast to 2014, Australia’s base metal industry
mines, Chinese smelters were given a legislative boost last contracted by an estimated 1.3 Moz (40 t) as losses from
year after the Chinese government announced a relaxation Mount Isa, Jaguar and Rosebery more than offset gains
of its import ban on ‘silver ores and concentrates’ (under from a start-up at Dugald River and Century on higher
the Harmonized System code 26161000) in November grades. At Mount Isa, the decision to cut zinc production
2015, an action that is expected to lead to increased flows to preserve the value of reserves in October 2015 led to
of base metal concentrates with higher silver assays into a 0.3 Moz (10 t), or 5%, drop in production. Jaguar and
China. Rosebery achieved record throughput, but the dominant

31
 WORLD SILVER SURVEY 2016

AN OVERVIEW OF CORPORATE TRANSACTIONS stake in Miniere de Touissit, the second largest silver producer in Morocco,
by the private firm Adp I Luxembourg, in a deal estimated at $16M.
The year started slowly in terms of transactions with the first major deal
coming in March when Hecla Mining purchased Revett Minerals in a $20M There were four silver streaming deals signed in 2015, for combined cash
all stock-transaction. This enabled Hecla to advance the newly acquired transactions of $2.3Bn. Two of these were purely for silver production and
Rock Creek silver-copper project in Montana. Agnico-Eagle Mines acquired both at one mine, Antamina. On October 7th Franco Nevada agreed a
Soltoro in April, picking up the El Rayo silver-gold project contiguous with payment of $610Min cash to Teck Resources, in return for the sale of silver
Agnico’s El Barqueno project in Mexico, in a cash and shares deal valued output from Teck’s attributable 22.5% interest in the mine, using a silver
at C$32M. In June, the Brazilian conglomerate Votorantim increased its payability factor of 90%, at 5% of the silver price until 86 Moz (2,675 t) has
stake in the Peruvian zinc miner, Minera Milpo from 50% to 60% in a deal been delivered, when it falls by a third. Less than one month later, Silver
estimated at $118M. In 2015 Milpo produced 7.6 Moz (238 t) of silver as a Wheaton and Glencore announced that the former would pay $900M for
by-product of zinc mining. On July 27th, First Majestic Silver announced all the silver production from the latter’s 33.75% stake in Antamina until
that it would acquire SilverCrest Mines, in a cash and shares transaction 140 Moz (4,354 t) has been delivered at which point they will receive 66%
valued at C$154M. With that First Majestic added a sixth producing of Glencore’s share. Silver Wheaton will then pay 20% of spot for each
mine in Mexico, Santa Elena to its portfolio. Meanwhile in September ounce delivered. During July and August, Royal Gold made polymetallic
Oceanus Resources acquired El Tigre Silver Corp and with it an historically streaming deals with New Gold and Barrick Gold at their Rainy River and
producing silver and gold property by the same name in Sonora, Mexico, in Pueblo Viejo mines respectively amounting to $785M in total.
an all-share deal valued at $5M. December saw the purchase of an 8.8%

factor was the lower grade of material being processed, a 2.3 Moz (70 t) increase in silver output to a total of
leading to a 0.3 Moz (9 t) fall in output 9.3 Moz (288 t). Despite lower milling volumes from
Boliden Area, silver output was boosted by 0.5 Moz (17 t)
EUROPE due to a 40% increase in grade.

European silver production increased by 9.1 Moz (284 t), Output from Poland increased by 2% to total of
the largest annual increase since 2003, to a total 41.5 Moz (1,291 t), the highest level of production since
of 120.4 Moz (3,746 t). This growth was driven by a 2003. Output from KGHM Polska Miedź’s silver bearing
14% increase in output from Russia’s largest primary copper mines, 99% of Polish output, was robust, reaching
silver mine, Dukat, which increased silver production 41.2 Moz (1,283 t) last year on the back of higher ore
by 2.4 Moz (87t) in 2015 thanks to an increase in production volumes.
ore processing rate and silver grade, both up by
13% year-on‑year. Russia’s total mine output rose to AFRICA
50.5 Moz (1,572 t) the fifth consecutive annual rise and the
highest level of output for over twenty years. We estimate African mine supply rose slightly by 6% year-on-year to
that the country’s gold mines produced an additional 14.8 Moz (461 t). Moroccan output recorded an 8% gain,
0.9 Moz (28.0 t) of silver in 2015, with Kupol and Kubaka rising to 9.5 Moz (296 t) this is mostly attributable to the
adding a combined 1.0 Moz (31.1 t). This increase more than continent’s largest silver producing mine, Imiter, production
offset a 32%, 0.5 Moz (15.6 t) decline in silver output from at which rose by 12% to 6.6 Moz (205 t) due to an
Polymetal’s gold operations in Okhotsk as the Khakanja appreciable increase in the tonnage processed. Although
open pit ceased production. Silver volumes from Russia’s silver in concentrate production fell, sales of silver-rich
MINE SUPPLY

lead/zinc and copper mining industries are estimated to pyrite boosted output from Bisha in Eritrea, which took the
have increased by 0.3 Moz (9 t) in trend with marginally nation’s output to 2.3 Moz (70 t) last year. Africa’s largest
higher output since 2010. decrease in silver production was recorded at the Boseto
copper mine in Botswana which shut down in February
Swedish silver mine output increased by 3.1 Moz (96 t), 2015, having produced 0.7 Moz (22 t). The owner, Discovery
or 25%, to a total of 15.9 Moz (494 t) the sixth largest Metals was wound up in June and the mine bought by
annual increase at a country level. This gain can largely Cupric Canyon Copper, which plans to re-start production
be attributed to an expansion at Garpenberg realizing in July 2016.

32
 WORLD SILVER SURVEY 2016

AVERAGE PRICES OF SOURCE METALS WORLD MINE PRODUCTION OF SOURCE METALS

($/ton) Change (Thousand tons) Change

2011 2012 2013 2014 2015 y-o-y 2011 2012 2013 2014 2015 y-o-y
Lead 3-Mth 2,390 2,074 2,157 2,113 1,795 -15% Lead 4,630 4,920 5,264 4,944 4,360 -12%
Zinc 3-Mth 2,210 1,964 1,940 2,167 1,938 -11% Zinc 12,582 12,898 13,054 13,512 13,463 0%
Copper 3-Mth 8,821 7,945 7,345 6,827 5,493 -20% Copper 16,049 16,634 17,994 18,370 19,022 4%
Gold ($/oz) 1,572 1,669 1,411 1,266 1,160 -8% Gold (tons) 2,829 2,850 3,042 3,131 3,158 1%
Source: GFMS, Thomson Reuters; LME; ILZSG Source: GFMS, Thomson Reuters; ILZSG

OUTLOOK
Copper mines are the only sector expected to contribute a
• Silver mine production is expected to suffer losses during higher volume of silver during 2016. This exception to the
2016 as a consequence of supply cuts in lead and zinc general silver production trend is attributable to a number
production, in combination with lower forecast output from of recently commissioned copper operations ramping up
both the primary silver and gold industries. to full capacity during this year, for example Constancia
and Las Bambas. Further support is expected following
Having reached a new peak in 2015, silver mine supply is expansions at established operations including Cerro Verde
expected to commence a sustained downtrend this year, and Antapaccay.
with a forecast decrease of 2%. This outlook comes as a
consequence of producers having reduced capital spending BY-PRODUCT ANALYSIS
in an attempt to protect margins, with global silver
production vulnerable to cutbacks in both the precious and • Production from the primary silver sector continued to grow
base metals sectors. in 2015, albeit at a lower rate, rising by 5%.

The lead/zinc sector suffered the most substantial losses • Silver produced as a by-product of other metals rose by
during 2015, and this trend is expected to continue this 6.7 Moz (209 t), or 1%, last year.
year. Significant supply cutbacks have already been
announced in the zinc mining industry, including at Primary silver production rose last year by 11.7 Moz (364 t)
Glencore’s Australian zinc operations, Mount Isa and despite a strong contraction at two of the largest
McArthur River. Loss of supply from Century, which ceased primary silver operations in the world, Cannington and
mining operations late last year, will also contribute to Fresnillo, which fell by a combined 7.0 Moz (219 t). In
lower output from the sector. terms of output, strong performance at the company
level came from Goldcorp (+3.6 Moz, 112 t), Fresnillo
Having been one of the driving forces behind higher plc (+2.7 Moz, 83 t), KGHM (+1.1 Moz, 35 t) and Hecla
output in 2015, on the back of additional supply from large (+0.5 Moz, 16 t). At the mine level, a ramp up at
operations such as Saucito and Dukat, the primary silver
sector is expected to give back some of its gains this year. INDEXED SILVER & BY-PRODUCT METAL PRICES
Higher output from operations such as San Jose in Mexico,
120
where a plant expansion is due for commissioning in 2016,
is expected to be more than offset by lower production
from several large primary silver mines, including Pirquitas
MINE SUPPLY

100

and Palmarejo. Likewise, in the gold industry, gains to

Index (Q1-12=100)

silver production in 2015 came from new supply from Cerro

80
Negro and higher output from established operations Lead
such as San Dimas. This momentum is not expected to Zinc
Gold
be sustained during 2016, with the outlook for the larger 60
Silver
operations generally flat to down, and silver output falls are Copper
expected as a consequence of a lack of new supply under 40
development in the gold mining industry. Q1-12 Q1-13 Q1-14 Q1-15 Q1-16
Source: LME, Thomson Reuters

33
 WORLD SILVER SURVEY 2016

SILVER OUTPUT BY SOURCE METAL

looming closures of the large Century and Lisheen mines in
(million ounces) 2014 % of 2015 % of Change
Output Total Output Total y-o-y Australia and Ireland respectively.
Primary 253.0 29% 264.7 30% 5%
Gold 112.7 13% 118.8 13% 5% However, zinc subsequently fell from grace. For one,
Lead/Zinc 317.8 37% 305.8 34% -4% it became clear that ample stocks of concentrate in
Copper 180.0 21% 192.5 22% 7% China,on top of a 0.2% rise in global mine output, would
Other 4.8 1% 4.8 1% 1% be sufficient to support refined production growth at
Source: GFMS, Thomson Reuters reasonable levels for some time to come. Secondly, the
demand picture had deteriorated significantly as the
Saucito (+6.6 Moz, 205 t), Dukat (+2.8 Moz, 87 t), Cerro de ailing steel sector inevitably hurt offtake of zinc for use in
Pasco Oxides Plant (+2.5 Moz, 78 t), and higher grades at galvanising, leaving the market in a 203,000 ton surplus
Uchucchacua (+1.9 Moz, 58 t) contributed significantly to last year.
the overall trend.
Zinc mine output in top producer China may have fallen
In line with an increase in gold production, silver output last year, but was more than offset by strong growth in
from the gold sector rose by an estimated 6.2 Moz (192 t), other large producing nations, including India (+19%) due
at a similar rate to last year despite a further decrease in to increased output from Hindustan Zinc. Furthermore,
the gold price. The majority of the increase is attributable Chinese mine output threatens to pick up again this year,
to the ramp up at Cerro Negro (+4.0 Moz, 122 t), encouraged by stronger domestic smelter demand on
Inmaculada (+2.1 Moz, 64 t), and higher grades at the back of lower spot and annual treatment charges for
San Dimas (+2.2 Moz, 67 t). imported concentrate. The strong recovery in the zinc price
over the first quarter may also incentivize Chinese mines,
Silver by-product metals copper, zinc and lead suffered particularly smaller ones, to return to the market.
double-digit price declines on the London Metal
Exchange (LME) in 2015 as their respective fundamentals Global refined lead production may have been flat in
deteriorated. LME benchmark copper led the way lower 2015, due largely to factors such as low domestic mine
last year, losing almost one-fifth of its value on an annual supply, rising costs due to stricter environmental rules,
basis to average $5,493/ton. A halving in the pace of global and low by‑product revenues in biggest producer from
demand growth to below 2% and a respectable 2.3% rise in China. However, this was more than offset by a 1.7%
output left the market recording its fourth consecutive year decline in demand which left it short of supply by almost
of surplus at 363,000 tons. 100,000 tonnes and prices some 15% lower than in 2014.
The drop‑off in demand for E-bikes in China was largely
China’s ongoing transition to a consumer-based economy responsible for the overall fall in consumption; a situation
and continued weakness in the property market had a which will continue to feature in 2016.
large part to play in the sluggishness of global demand.
Meanwhile, producers were slow to respond. A flurry of INDEXED GLOBAL METAL MINE PRODUCTION
mine production cutbacks in the final months of 2015, with
120
Glencore at the vanguard have since petered out. Lead Copper
Zinc Silver

Global copper mine output grew by 3.5% last year, driven Gold
MINE SUPPLY

by strong growth in Peru in particular, and helped by 110

Index (2011=100)

ramp‑ups such as that of HudBay’s Constancia mine and

the expansion at Freeport’s Cerro Verde.
100
The zinc market fared somewhat better on the whole in
2015 as prices fell by around 11% over the period to average
$1,938/ton. In the early months, the metal managed to
90
buck the generally weaker tone elsewhere, buoyed by 2011 2012 2013 2014 2015
Source: GFMS, Thomson Reuters; ILZSG

34
 WORLD SILVER SURVEY 2016

SILVER MINE PRODUCTION COSTS

PRODUCTION COSTS
(US$/oz unless stated) 2012 2013 2014 2015
TCC (by-product) 9.19 9.18 6.87 6.66
• On a co-product basis, cash costs with capex for 2015 TCC (co-product) - - 10.44 9.60
averaged $11.74/oz, an 11% drop relative to 2014. TCC (co-product) + Capex - - 13.14 11.74
Average Silver Price 31.15 23.79 19.08 15.68
In light of falling silver prices and the consequent squeeze Sample Size (Moz) 167.5 178.2 214.6 214.6
on margins, GFMS has sought to present silver producers’ Source: GFMS, Thomson Reuters
costs in a way that facilitates a clearer relationship between
costs and margin. This involved a re-interpretation of the pronounced weakening of most ‘producer currencies’ versus
data to also present costs on a co‑product basis, including the U.S. dollar since the second half of 2014 has offered
capital expenditure (capex). While cash cost net of by- substantial cost benefit. In 2015 compared to 2014, the
product credits is a useful metric, it is vulnerable to swings Mexican peso, Peruvian sol, Australian dollar and Argentine
in the pricing of silver’s by-product metals, which can peso were respectively 16%, 11%, 17% and 12% weaker. By
distort the picture. the co-product TCC+capex measure, 7% of the primary
industry, was ‘underwater’ against the annual average
Silver Total Cash Costs (TCC) net of by-product credits fell silver price of $15.68/oz, a 1% increase relative to 2014.
for the third consecutive year in 2015, by 3% to $6.66/ oz.
Increased output led to lower unit costs in Mexico, the The most significant production gain in the primary silver
world’s top producer, which was the influential factor industry was seen in Mexico, with the ramp-up of Saucito II
behind the global trend. However, this was partially offset contributing 6.6 Moz (205 t) additional production and
by sharply higher costs in Peru, Argentina, Chile and lowering the global average TCC + capex by $0.39/ oz.
the United States, magnified by the drop in gold (8%), TCC + capex for mines in Mexico fell by 14% to $12.31/ oz,
lead (15%), zinc (11%) and copper prices (20%). In 2015, while Peruvian and Australian operations saw a 10%
primary silver producers accounted for 30% of global reduction in costs to $10.49/oz and $9.88/oz respectively.
output and our cost data capture represented 81% of Within Peru, operational efficiencies at Huaron led to
primary supply greater unit cost savings, lowering the TCC + capex to
$10.49/oz. Although U.S. based primary silver mines did
On a co-product accounting basis, TCC + capex in 2015 not have the same advantage of currency devaluation, as
stood at $11.74/oz, down 11% from last year. The principal a group they succeeded in cutting cost by 8% to $13.21/oz
element of this reduction was aggressively lower capex, largely thanks to higher production. This was particularly
with lower fuel prices and importantly, weaker local the case at Rochester, where costs also benefitted from
currencies reducing costs expressed in U.S. dollars. A lower diesel costs and equipment rentals.
SILVER MINING COSTS
25 25

20 2014 Average Silver Price ($19.08/oz) 20

2015 Average Silver Price ($15.68/oz)

15 15
MINE SUPPLY
US$/oz

US$/oz

10 10

2015 TCC (Co-product) + Capex

5 2014 TCC (Co-product) + Capex 5
2015 TCC (By-product)
2014 TCC (By-product)
0 0
10 20 30 40 50 60 70 80 90
Cumulative Production %
-5 -5
Source: GFMS, Thomson Reuters

35
 WORLD SILVER SURVEY 2016

PRODUCER HEDGING of the global producer hedge book with a delta-adjusted

balance of 16.2 Moz (504 t).
• In 2015, the delta-adjusted hedge book grew by
7.8 Moz (244 t). Among other companies, 2015 saw the return of two
companies with a ‘track record’ of hedging, namely
Over the course of 2015, the delta-adjusted hedge book Hochschild and Minera Frisco, absent since 2009 and
rose moderately, expanding by 7.8 Moz (244 t) as fresh 2011 respectively. Within 2015, Hochschild entered into
hedging from Industrias Peñoles and Hochschild Mining 6 Moz (187 t) of forward sales at $17.75/oz for delivery in
more than offset the settlement of contracts by Minera 2015, followed by a second similar hedge for an additional
Frisco and Coeur Mining as hedges matured. Much of the 6 Moz (187 t) at $15.93/oz. The second tranche is scheduled
activity was noted in the first half of the year, followed by to be delivered over 2016, together with zero-cost collar
a slowdown in H2 2015, which coupled with the overall covering 3 Moz (93 t) of output at an average floor price of
expansion of the option book, the composition of the $14.0/oz, and a cap of $17.6/oz. At end-2015, Hochschild’s
hedge book stood near 2010 levels as options contract hedge book covered 55% of its 2016 production. Turning
became more predominant. Forward sales also increased to Minera Frisco, the Mexican silver producer hedged
year‑on‑year, albeit at a lower rate than options, adding 4.8 Moz (149 t) of output at an average price of $16.14/oz
almost 0.6 Moz (18 t) in 2015. With the majority of for delivery in 2016.
these positions due to expire between 2016 and 2019,
the proportion of the hedge book composed of option The GFMS team at Thomson Reuters calculates the delta-
contracts, when measured by the nominal scale of the adjusted global hedge book volume using market data
hedge book (number of contracts) rather than by option and proprietary tools from Thomson Reuters Eikon. The
delta, rose from 58% at end-2014 to 69% at end-2015. This chart below plots sensitivity of the hedge book with respect
left the delta-adjusted position of the hedge book at end of to changes in the silver price, assuming that volatility,
the period at 39.0 Moz (1,213 t). interest rates and other factors remain equal. Had silver
prices dropped by an additional $3/oz, the volume of silver
Activity in 2015 was most notably driven by the activities delta-hedged against the option book would have risen by
of Peñoles, which entered into a series of zero-cost collars 5.8 Moz (182 t), while a $3/oz increase would have resulted
covering 20.6 Moz (641 t), though almost half of this was in a 9.7 Moz (301 t) drop in volume delta-hedged. As the
in replacement for maturing positions, or an additional bought put portion of the book on average stood closer to
11.9 Moz (370 t) of output relative to last year. With an being in-the-money than sold call component, the option
average floor price of $15.06/oz, and a cap of $19.06/oz, book acted more as a price floor than a cap, which is
the puts from Peñoles’ collar structure sat deep-in-the- reflected by the additional sensitivity of the hedge book to
money at end-2015. At end-2015, Peñoles’ hedge book the downside.
accounted for 40%

PRODUCER HEDGING: OUTSTANDING POSITIONS SENSITIVITY OF THE GLOBAL HEDGE BOOK

120 50 End-2015 LBMA

Delta-adjusted Options Net Puts
Silver Price $13.82/oz
Forwards Net Calls
100 Forwards
40
MINE SUPPLY

80
Million Ounces
Million Ounces

30

60
20
40

10
20

0 0
2006 2008 2010 2012 2014 7.82 10.82 13.82 16.82 19.82
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

36
 WORLD SILVER SURVEY 2016

5. SUPPLY FROM ABOVE-GROUND STOCKS

• Identifiable above-ground stocks rose by 9% year‑on‑year, BULLION STOCKS - REGIONAL BREAKDOWN IN 2015

ABOVE-GROUND STOCKS
to 2,301 Moz (71,578 t) by the end of 2015. These stocks
could cover 25 months of physical demand, the highest level Other: 0.5 Moz

SUPPLY FROM
Asia
of cover since 1995 and up from 13 months in 2005. 553.7 Moz

• Scrap recycling added 146.1 Moz (4,545 t) to annual supply

in 2015, down 13% from the previous year. This drop was the Europe
fourth successive decline and was led by a slump in flows 963.5 Moz

from China where supply fell 40%.

OVERVIEW North America

800.9 Moz

While some silver gets lost, the majority of silver ever

produced remains above ground today and is theoretically Source: GFMS, Thomson Reuters
available to the market in various forms. Some of this
above-ground stock serves a dedicated use until it is
recycled back into a homogenous form while the balance relatively expensive to store because its volume to price
is stored in vaults as bullion. This chapter covers shifts in ratio is higher than that of gold.
above-ground bullion stocks as well as additions to annual
supply from scrap recycling. Additionally, GFMS tracks the recycling of above-ground
silver from fabricated sources, namely coins, jewelry,
A large portion of the above-ground silver bullion stock silverware, e-waste, photographic papers and other “open
is tracked by GFMS in order to glean insight about price loop” sources of scrap. This scrap material gets recycled
movements and demand trends. GFMS tracks bullion and refined back into bullion form. While this newly
stocks held by governments, stockpiled by industry, stored recycled silver does not increase above-ground stocks,
at futures exchange warehouses, and held in custodian but mobilizes above-ground stocks such that they can be
vaults (allocated or unallocated and including ETPs). reused or stockpiled in bullion form. Annual changes in
Silver held in custodian vaults is estimated based on silver scrap flow are primarily influenced by silver prices
data collection of ETP silver holdings and other reported and economic conditions.
volumes, a confidential survey, and other field research.
IDENTIFIABLE BULLION STOCKS
Silver bullion stocks are mostly composed of metal
allocated to ETP investors, institutional and hedge fund Identifiable bullion stocks can be divided into two
investors and other kinds of longer-term holders. Silver is categories: stocks that are reported and unreported GFMS

IDENTIFIABLE ABOVE-GROUND SILVER BULLION STOCKS

(Moz) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Custodian Vaults* 729.0 726.8 605.5 839.3 826.5 933.9 806.7 1,008.4 1,207.4 1,422.4
ETPs 158.3 213.1 314.7 472.0 601.6 577.5 632.8 635.3 635.5 617.8
Exchange* 106.4 125.9 114.7 93.6 83.4 98.0 159.3 168.1 158.1 154.4
Government 249.2 206.7 176.2 160.5 116.4 104.3 97.0 89.1 89.1 89.1
Industry 25.8 16.6 19.5 16.6 21.6 20.0 21.8 19.1 17.0 17.6
Total 1,268.6 1,289.2 1,230.6 1,582.1 1,649.5 1,733.7 1,717.7 1,919.9 2,107.1 2,301.3
Months of Demand 16 14 17 18 18 21 18 20 22 25
Source: GFMS, Thomson Reuters; Respective ETP issuers, exchange websites, Japan Ministry of Economy, Trade and Industry, USGS
*Custodian vault and exchange warehouse stocks exclude stocks allocated to ETPs.

37
 WORLD SILVER SURVEY 2016

IDENTIFIABLE STOCKS EXPRESSED AS MONTHS OF DEMAND

stock estimates, that are based on confidential surveys and
field research. Reported stocks include our industry, futures 45 40
Months of Demand Silver Price
exchange, and ETP categories as well as the government 40
ABOVE-GROUND STOCKS

35

Year-end Silver Spot Price (USD/oz)

category for some countries. Unreported stocks include 35
30
our custodian vault category and the lion’s share of our
SUPPLY FROM

Months of Demand
30
25
government category. Reported stocks accounted for 35%
25
of the total identifiable bullion stock series in 2015. These 20
20
same stocks accounted for 48% of the total in 2012, albeit 15
15
that the lower level in 2015 was more than double the 10
10
level in 2004. The long term uptrend is testament to the
5 5
growing proliferation of ETPs. The more recent downtrend
is due to an increase in the recorded level of unreported 0 0
1990 1995 2000 2005 2010 2015
above-ground stocks, particularly in Asia following new Source: GFMS, Thomson Reuters
information and data gathered over time.

Total identifiable above-ground bullion stocks were At the end of 2015, total identifiable bullion stocks
2,301.3 Moz (71,578 t) at the end of 2015, up 9% from represented 25 months of total physical demand, the
year ago levels. Total stocks have been rising since 2012. highest since 1996 and up from a trough of 13 months in
This follows an upward revision after field research to 2005. In the early 1990s, identifiable stocks represented
our estimates for the opaque area of custodian vault 44 months of demand, mostly due to significantly higher
stocks of on average of 10% a year for the last three years government inventories. Government inventories have
with a bias to the most recent year. This suggests silver declined due to silver’s reduced role in monetary systems
stocks have been boosted by lower prices in some areas and circulated coin production. As illustrated in the
and sticky holders in others. Indeed, field research has chart above, nearly flat silver prices in the 1990s were
confirmed that many investors are reluctant to sell silver accompanied by a rapid decline in stocks expressed as
accumulated in previous years. Further, ETP holdings only months of demand. Only when stock cover reached its
edged marginally lower and have been rising in 2016. lowest point of 13 months of demand in 2005 did prices
While exchange stocks have dropped and industry stocks begin to materially increase.
have risen a fraction, these slight changes (and no change
from government stocks) are swamped by the much more CUSTODIAN VAULT STOCKS
significant increase in custodian vault stocks (excluding
ETP allocations), chiefly in Asia and North America. Custodian vault stock data excludes ETP holdings, but it is
important to note that most custodians of ETP silver stocks

IDENTIFIABLE ABOVE-GROUND SILVER INVENTORIES CUSTODIAN VAULT STOCKS*

2,500 1,600 North America

Industry
Asia
Government 1,400
2,000
Exchange 1,200
Million Ounces (end-year)

Million Ounces (end-year)

1,000
1,500

ETPs 800

1,000
600

400
500 Europe
Custodian Vaults
200

0 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters; exchanges, ETF issuers, METI, USGS Source: GFMS, Thomson Reuters *Stocks exclude silver stocks allocated to ETFs

38
 WORLD SILVER SURVEY 2016

also store silver in vaults that are not allocated to ETPs. summer months, resulting in a rise in bullion stocks. This
The same is true of futures exchange warehouses. also could have been aided by a reallocation by some North
American investors from their ETP holdings, which fell by

ABOVE-GROUND STOCKS
Custodian vault stocks increased by 215.0 Moz (6,911 t) to 3% last year.
total 1,422.4 Moz (45,730 t) by end 2015. Indeed, custodian

SUPPLY FROM
vault stocks including ETP allocations have increased at In contrast, European vault stocks, which accounted for
an 8% compound annual growth rate over the past fifteen 33% of total custodian vault stocks in 2015, declined 6%
years. Over this period ETP holdings grew from less than 1% to 472.5 Moz (14,696 t). This decline can be attributed to
of these stocks to almost 80% at their 2012 peak. It is worth reduced institutional investor interest in the region. Indeed
noting though, that this percentage dropped below 50 last European ETP holdings fell by 3% in 2015.
year, for the first time since 2008. While ETP holdings fell
in 2015, this drop is chiefly due to the marked rise in Asian FUTURES EXCHANGES
and North American vault stocks, which was partially offset
by a decline in European stocks. Any futures exchange that offers physical settlement will
likely store metal in a vault. Only about 2% of futures
Stocks in Asia rose by 153.7 Moz (4,781 t) last year. Central contracts are settled in physical, so it is not necessary to
to this was the fact that Chinese banks continued to expand hold metal that equals the total level of open interest.
their precious metals leasing businesses in 2015, which
have required increasing holdings of precious metals. Only three exchanges report silver stocks: COMEX in the
India also saw a marked increase in vaulted silver stocks United States, the Tokyo Commodity Exchange (TOCOM),
last year and indeed silver imports touched a record and the Shanghai Futures Exchange (SHFE). These stocks
high. Singapore’s vaulted stocks rose by more than half totaled 180.0 Moz (5,598 t) at the end of 2015, a fraction
in 2015 and research suggests there is still demand for higher than a year earlier. Stocks on the SHFE rose by
new capacity in the city state. Asia accounted for 51% of 15.2 Moz (472 t) last year. This increase reversed the
custodian vault stocks last year, up from 26% as recently dramatic decline in 2014 when Chinese producers were
as 2012, driven particularly by the growth in the Chinese holding off from selling silver into the market, awaiting
leasing market. Field research indicates this source of higher prices. Therefore, the tightness in the Chinese
growth may well have come to a halt in 2016. market was due to lower velocity rather than lower supply.
However, SHFE stocks had already doubled by the end of
In a similar vein, North American stocks, not allocated to the first quarter of 2015, and by the end of the year had
ETPs, also rose appreciably, by almost 70% to 225.6 Moz quadrupled suggesting that the tightness in supply in 2014
(7,050 t) by the end of 2015. This fits with the backdrop is behind us. It is worth noting though, that even this higher
of very healthy retail investment, particularly during the level was still only an eighth of the level on COMEX.

COMEX WAREHOUSE STOCKS TOCOM inventories decreased 26% last year to more than
reverse the increase of the previous year and leaving stocks
200 50 at 0.13 Moz (4.1 t) at the end of 2015, the lowest year-end
level in over 30 years.
Month-end Stocks (Million Ounces)

40
150
These increases on the Asian exchanges were almost
Silver Price (US$/oz)

30 exactly offset by a drop in COMEX stocks of 14.9 Moz (462 t)

100

20 SHFE SILVER STOCKS

(Million ounces; end period)
50 Q1 Q2 Q3 Q4
10
2013 35.7 20.0 14.8 14.4

0 0
2014 12.3 7.7 2.6 3.9
Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 2015 9.2 12.1 10.2 19.2
Source: COMEX Source: SHFE
Jan-09 Jan-15

39
 WORLD SILVER SURVEY 2016

SILVER ETP HOLDINGS BY VAULT LOCATION Canada is also home to the first exchange-traded silver-backed
security, the Central Fund of Canada, which has been trading on
While a more detailed discussion about silver ETP holdings the Toronto Stock Exchange since the 1960s and began holding
ABOVE-GROUND STOCKS

is contained in the Investment chapter, this chapter’s ETP gold and silver for investors in 1983. Its silver holdings have
discussion is centered on the difference between ETP holdings increased 25-fold since that year.
SUPPLY FROM

by investor domicile and holdings by vault location. ETP holdings

are a large and transparent portion of above-ground silver A common misconception in the market is that massive ETP
bullion stocks, accounting for 27% of the total as of the end selloffs would result in the dumping of metal within the country
of last year. ETP holdings are a relatively new category in our or massive export of metal from the country where ETP sellers
identifiable above-ground stock series, having only accounted for are domiciled. This, however, is not necessarily the case,
3% of the total in 2005. considering the dominance of vault locations within major
precious metals trading hubs. Additionally, any offloading
U.S. investors own 55% of silver ETP holdings, based on an ETP’s of metal from ETP sales will more likely convert the metal in
primary exchange, while the London Stock Exchange silver ETP the vault from being allocated to ETP shareholders to part of
investors only account for 9% of holdings and silver ETPs traded their unallocated or other allocated holdings. That said, metal
on the Toronto Stock Exchange account for 22% of holdings. could be shipped out of these major hubs should demand grow
Swiss investors own 13% of holdings based on Swiss exchange- significantly elsewhere.
traded silver funds. Investors in Japan, Hong Kong, and Australia
make up the 1% balance. In tracking the actual location of ETP holdings, GFMS is now
better equipped to adjust our custodian vault data series as
In contrast, 60.5% of global silver ETP holdings are vaulted in well as to provide a breakdown of above-ground bullion stocks
the United Kingdom while only 4% of holdings are vaulted in by region. A couple of ETPs use multiple vaults in multiple
the United States. Switzerland is home to 13% of global ETP locations; therefore assigning total holdings of each ETP to the
holdings, broadly in line with its share of investor ownership. exchange location or to a single location may not be accurate.
Similarly, Canada is home to 22% of holdings. Japanese ETP- Additionally, a portion of eligible stocks reported by COMEX are
allocated inventories amount to 0.4% of the global total, also in allocated to ETPs. Approximately 21% of the 120.3 Moz (3,744 t)
line with Japanese investor ownership. of COMEX eligible stocks at the end of 2015 were allocated to
ETPs. We have adjusted for this nuance in our total identifiable
Over time, London’s share of ETP holdings by vault location has bullion stock data as well to avoid double-counting.
declined from a peak of 72% at the end of 2006 to below 61% at
the end of 2015. Switzerland gained market share in this period,
increasing from 0% to 13%. Canada’s share has been relatively
stable in the period, ranging from 15% to 23% in any given year.

SILVER ETP HOLDINGS BY VAULT LOCATION SILVER ETP HOLDINGS BY INVESTOR DOMICILE

Japan UK’s share Canada US’s Share of Total

750 100
United States 750 United Kingdom 90
Switzerland Switzerland 80

75 70
Canada
500
500 60
Million Ounces

Million Ounces

50 Canada 50
%

40
250
250 30
25
20
United Kingdom United States
10
0 0
0 0
2006 2008 2010 2012 2014
2006 2008 2010 2012 2014
* “Other” includes Japan, Australia and Hong Kong
Source: GFMS, Thomson Reuters; respective ETP issuers & custodians
Source: GFMS, Thomson Reuters; respective ETP issuers & custodians

40
 WORLD SILVER SURVEY 2016

to total 160.7 Moz (4,997 t) at the end of 2015. The drop A crucial change is the absence of any Russian disposals in
occurred in the third quarter, unsurprisingly when there was the last couple of years. The country’s silver stocks are far
an upsurge in retail investment demand. COMEX stocks smaller than they were a decade ago. For instance, from

ABOVE-GROUND STOCKS
consist of eligible and registered stocks. Eligible stocks 2004 to 2010, gross sales from Russia amounted to over
are stocks in COMEX warehouses that meet the criteria 200 Moz (6,300 t).

SUPPLY FROM
for delivery via the exchange, but cannot be delivered.
Registered stocks are stocks that meet the criteria for Finally, China and India, each of which had been major
delivery and can be delivered. Over the course of 2015, sellers between the start of this century and 2007, were
eligible stocks trended higher, while registered stocks fell. both absent from the market once again in 2015. As far as
China is concerned, it is our understanding that following
ETP silver stocks stored in the United States use eligible several years of heavy sales, silver stocks have already been
stocks reported by the COMEX. As such, we adjust the reduced significantly from “excessive” levels.
“Exchange” stock data lower by the amount of ETP stocks
vaulted in the United States. This adjustment is reflected in INDUSTRY
the table located on the first page of this chapter. Excluding
ETPs, total exchange stocks were 154.4 Moz (4,802 t) at the Industry stocks consist of reported Japanese and United
end of 2015, down 2% from the previous year. States data. Japanese stocks include stockpiles of silver
at producer and merchant facilities. U.S. stocks consist of
GOVERNMENT STOCKS producer, consumer, and dealer stockpiles. Industry stocks
totaled 17.6 Moz (547 t) last year, a little higher than in the
Assessments of silver stocks held by governments are previous year as the Japanese economy slowed down. It
largely based on private information gathered during should be noted that these stocks do not include working
the course of our field research, as there is little publicly pipeline stocks, which are not considered to be part of our
available data on levels of, and changes in, government identifiable bullion stock series.
silver stocks. After minimal sales in both 2012 and 2013,
no government sales are estimated to have taken place SCRAP
in 2014 or 2015. While our field research indicates no
activity at all, even if a small transaction did take place • Silver scrap supply dropped by 12.5% to 146.1 Moz (4,545 t),
it would have been at a very low level when compared to the lowest volume recorded since 1996.
the previous fifteen years when disposals averaged 48.4
Moz (1,392 t) per annum over the 1999-2013 period. At end In 2015 silver scrap supply fell for the fourth successive
2015, total government silver stocks amounted to 89 Moz year, by 12.5% to 146.1 Moz (4,545 t). This was the third
(2,551 t). year in a row with double digit declines in scrap supply.
Overall, it sent the supply from scrap to a 23-year low. As
NET GOVERNMENT STOCK SALES a proportion of total supply, scrap dropped to just 14%, the
lowest level since at least the 1980s, after averaging 25%
90 of the total as recently as 2011 and 2012. This decline in
Others
80 supply was a key reason underpinning the physical market
Russia
70 China
remaining in a deficit last year.
60
Million Ounces

50
Crucial to the drop in scrap supply was, unsurprisingly,
silver prices averaging their lowest level since 2009.
40
That said, prices in some local currencies actually rose,
30
sometimes appreciably and others saw much more modest
20
price declines due to the devaluation of many emerging
10
market currencies. This had some ameliorative impact
0
2006 2008 2010 2012 2014
on flows. This was particularly noticeable for some of the
Source: GFMS, Thomson Reuters
stuttering BRIC economies and some countries in South

41
 WORLD SILVER SURVEY 2016

WORLD SCRAP SUPPLY WORLD SCRAP SUPPLY

300 50 300 40
Others United States Real Silver Price
India Europe
ABOVE-GROUND STOCKS

35
250
260 40 China
Silver Scrap (Million Ounces)

30

Constant 2015 US$/oz

SUPPLY FROM

Silver Price (US$/oz)

200

Million Ounces
25
220 30
150 20

180 20 15
100
10
140 10
50
5

100 0 0 0
1990 1995 2000 2005 2010 2015 2006 2008 2010 2012 2014

Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

America and Africa, where the combination of sharply One other feature supporting volumes in Europe is
weaker currencies and economies in recession led to increased volumes of e-scrap returning from the market.
distress sales. As a result, South America, and to lesser It should be noted though that this metal content is
extent Africa, were the only regions where we saw an dropping, due to falling volumes going into electrical
increase in scrap supply. applications earlier in the century, so refiners are having to
process more to keep recycling metal output stable. Our
These though were largely the exceptions that proved industry contacts have also indicated that while flows from
the rule, with steep declines in many key Asian markets jewelry and silverware have continued to be under pressure
ensuring that supply from that region dropped below some other smaller areas are growing. One interesting
50 Moz (1,538 t), quite a contrast from the 3-figure totals development is in the automotive sector where rising silver
of 2011 and 2012. Indeed the performance in China was content in cars in the early part of this century is leading
particularly startling, with a drop of 40% fueled by weaker to increased flows coming back from this source. This is
industrial activity and the lower silver price. particularly important in Germany and helped that market
increase 4% last year.
Looking in more detail at the performance in major regions
and countries we start with Europe, which in 2015 became For the third successive year silver scrap in Central and
the largest source of scrap supply. It should be noted Eastern Europe fell in 2015, although the 5% drop to
though that this was due to the very steep decline in Asia almost 3 Moz (91.2 t) was less severe than in the year
whereas European scrap supply only fell by 1% to 52.7 Moz before. The new local reverse VAT charge introduced in the
(1,640 t), a six-year low. Czech Republic and similarly in Spain in April 2015, had a
dramatic negative impact on scrap volumes in both these
There were a few factors that lessened the drop. Most countries. This sharp drop directed scrap flows towards
substantially, almost all European currencies weakened some neighboring countries.
appreciably against the dollar and hence silver price drops
were much more modest in local currency terms. Indeed, Silver scrap in the United States totaled 35.3 Moz (1,099 t)
the sharply depreciating Turkish lira and Russian rouble in 2015, down 12% from the previous year. This was the
ensured markedly higher silver prices underpinning supply fourth consecutive annual drop in scrap generation within
in these countries. However, it is interesting to note that the country. Scrap from high-grade sources like jewelry
even though rouble silver prices were appreciably higher and coins was driven lower by the relatively weak silver
this did not prevent a slight fall in silver scrap from that price. An improved economy and jobs market also reduced
country. Field research indicated that exceptionally high scrap sales among households. Silver scrap from low grade
gold scrap flows effectively discouraged collectors and sources, namely electronic waste, dropped by between 15%
some refiners from taking lower margin silver refining. and 20% last year, which was a stronger rate of decline

42
 WORLD SILVER SURVEY 2016

TABLE 4 - SUPPLY OF SILVER FROM THE RECYCLING OF SCRAP

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Germany 15.1 15.1 14.6 12.6 14.9 16.7 21.6 17.3 14.3 14.9

ABOVE-GROUND STOCKS
Russian Federation 8.4 8.8 8.3 8.4 11.5 11.1 10.9 10.0 10.3 10.0
Italy 5.5 5.6 5.9 5.8 6.5 9.7 9.9 8.7 7.9 6.8

SUPPLY FROM
United Kingdom 10.9 11.2 10.9 10.2 6.4 11.3 9.8 7.2 5.6 5.8
France 4.5 4.6 5.1 5.5 6.2 7.0 5.9 5.2 4.9 4.9
Turkey 1.1 1.0 1.1 1.1 1.0 1.2 1.0 1.0 1.5 1.7
Austria 1.3 1.2 1.2 1.1 1.1 1.2 1.2 1.2 1.1 1.1
Czech Republic 0.7 0.9 0.9 0.9 1.2 1.6 1.6 1.4 1.4 1.1
Poland 0.7 0.8 0.7 0.7 0.9 1.1 1.2 1.0 0.9 1.0
Netherlands 1.3 1.1 1.1 1.0 1.1 1.2 1.2 0.9 0.8 0.9
Spain 0.4 0.4 0.5 0.5 0.7 1.3 1.3 1.1 1.0 0.8
Sweden 0.9 0.9 0.9 0.8 0.8 0.9 0.9 0.7 0.6 0.7
Belgium 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.5 0.5 0.5
Portugal 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.4
Denmark 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4
Slovakia 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3
Hungary 0.2 0.2 0.2 0.2 0.3 0.3 0.4 0.3 0.3 0.3
Finland 0.4 0.3 0.3 0.3 0.3 0.4 0.4 0.3 0.3 0.3
Norway 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3
Other Countries 1.2 1.2 1.2 1.2 1.2 1.3 1.3 1.0 0.9 1.0
Total Europe 54.3 55.0 54.5 51.8 56.0 68.2 70.6 58.9 53.2 52.7
North America
United States 53.2 53.6 55.4 54.4 64.8 76.4 68.9 46.9 40.3 35.3
Canada 1.4 1.6 1.7 1.5 1.6 1.8 1.6 1.1 1.0 0.9
Mexico 2.3 2.7 3.1 3.2 4.0 4.5 4.7 1.1 0.4 0.4
Total North America 57.0 57.9 60.2 59.1 70.4 82.7 75.2 49.1 41.7 36.6
Central & South America
Brazil 1.0 1.0 1.0 1.1 1.5 2.5 2.5 2.0 1.9 2.3
Venezuela 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.3 0.4
Uruguay 0.2 0.2 0.2 0.2 0.3 0.4 0.4 0.4 0.4 0.4
Other Countries 1.9 1.7 1.6 1.4 1.8 2.2 2.1 1.5 1.0 1.0
Total Central & South America 3.4 3.2 3.0 2.9 3.9 5.5 5.4 4.2 3.6 4.1
Asia
Japan 26.0 25.7 23.7 21.3 20.9 23.0 21.3 20.0 19.6 17.4
China 20.4 22.5 22.7 25.3 29.2 31.9 30.9 30.1 26.7 16.1
S Korea 7.7 7.8 7.7 8.4 9.4 10.0 9.1 8.4 6.9 4.1
Taiwan 2.8 2.9 3.1 3.6 4.1 4.5 4.3 3.6 3.1 2.7
India 22.7 16.1 13.8 15.0 17.9 20.6 24.8 5.4 3.0 2.5
Thailand 2.6 2.7 2.9 3.1 3.7 3.7 3.2 2.8 2.2 2.0
Saudi Arabia 1.8 1.9 1.9 1.9 2.2 2.3 2.2 2.0 1.9 1.7
Israel 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.4 0.4 0.4
Singapore 0.5 0.5 0.5 0.5 0.5 0.6 0.5 0.5 0.4 0.4
Kazakhstan 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.2 0.3
Indonesia 0.4 0.4 0.4 0.4 0.4 0.5 0.4 0.4 0.4 0.3
Uzbekistan 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.2 0.3
Vietnam 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.3
Hong Kong 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.2
© GFMS, Thomson Reuters / The Silver Institute

43
 WORLD SILVER SURVEY 2016

TABLE 4 - SUPPLY OF SILVER FROM THE RECYCLING OF OLD SCRAP

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Other Countries 1.1 1.2 1.2 1.3 1.5 1.7 1.6 1.3 0.8 0.7
Total Asia 87.8 83.4 79.5 82.3 92.0 100.8 100.3 76.3 66.5 49.4
ABOVE-GROUND STOCKS

Africa
Morocco 0.9 0.9 0.9 1.0 1.0 1.1 1.1 1.0 0.9 1.0
SUPPLY FROM

Egypt 1.5 1.5 1.7 1.8 2.0 0.9 0.8 0.7 0.6 0.6
Other Countries 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.6 0.6 0.6
Total Africa 3.0 3.0 3.2 3.4 3.7 2.7 2.6 2.3 2.1 2.2
Oceania
Australia 1.7 1.7 1.6 1.6 1.6 1.6 1.4 1.3 1.2 1.1
Total Oceania 1.7 1.7 1.6 1.6 1.6 1.6 1.4 1.3 1.2 1.1

World 207.1 204.2 202.0 201.2 227.5 261.5 255.5 192.1 168.3 146.1
© GFMS, Thomson Reuters / The Silver Institute

than for high-grade scrap volumes, but a smaller decline field. Indeed, with reduced end-user demand, a function
compared to 2014 for the segment. This decline was driven of a weaker global economic environment, demand for
by lower silver content in e-waste sourced to recyclers. replacement electronics was lower in several segments,
Feedstock volumes in gross weight terms increased last which in turn limited recycling of old appliances. Scrap
year, however years of aggressive thrifting activity among from China retreated 40% in 2015 to a level not seen since
electronics manufacturers amid rising precious metals 2004. Chinese refiners were not keen on taking scrap silver
prices has continued to diminish recycling feedstock values. to work with, as it did not make economic sense given how
The United States is the largest generator of e-waste in the low the silver price was last year. The continual decline
world, but scrap from e-waste recycling only accounts for a in domestic industrial activities, particularly in the fourth
single-digit share of total scrap generated in the country. quarter, also resulted in less silver to recover. A sizable
drop in industrial recycling was also chiefly to blame for
In India scrap supply declined for a third consecutive year the weaker scrap flows in Taiwan and South Korea where
falling by 14% from 2014 to 2.5 Moz (79 t), the lowest in recoveries slipped by 12% and 41% respectively.
more than 15 years. This decline is largely attributed to
three consecutive years of falls in annual average prices, In Japan, scrap volumes are estimated to have fallen by
which last year dropped by 14%. Volume from jewelry 11% last year, reaching 17.4 Moz (542 t). This represents
scrapping was insignificant to the extent that there was the lowest level since 1990, and was mainly due to the
hardly any exchange of old jewelry for new. However, ongoing decline in scrap collected from the photographic
distress sales from marginal farmers were prevalent due to industry and process scrap from the industrial sectors. One
two consecutive years of below normal monsoon rainfall sector that has remained broadly constant has been X-ray
and it was not just in carat jewelry but also clothes with jari scrap, which contains more silver than consumer film, as
(silver thread). its availability is dependent not on price but on medical
institutions having kept the stock for the required length
Scrapping largely came from the industrial sector, mainly of time stipulated by statutory obligations. In yen terms
through extraction from catalysts and from the glass the price of silver declined 6% in 2015, a five-year low, with
industry; these were largely processed by firms in the the weak price limiting the scrapping of old electronics
formal sector. Electrical contacts, x-ray films, plated items by consumers and indeed across the supply chain, as
and electronics goods however still continue to be sources fabrication volumes were also broadly weaker due to the
of supply in the informal market. struggling economy and softer export demand.

While the significantly weaker silver price played a key Turning to 2016, global silver scrap flows have picked
role in the annual decline across Asia, another contributor up appreciably early in the year, buoyed by the marked
was a general decline in industrial activities, which in turn increase in the silver price and underpinned by a stuttering
resulted in less silver (and other metals) recovered from this global economy.

44
 WORLD SILVER SURVEY 2016

6. SILVER BULLION TRADE

• Silver bullion trade in 2015 continued to be dominated Although this deficit rose by 4% year-on-year, it was still
by flows to India, where total imports reached an all time less marked than in 2013.
high of 256.0 Moz (7,954 t). The decline in silver prices
encouraged fabricators and investors to build inventories. In 2015, UK official exports of bullion increased by 13% to
120.5 Moz (3,747 t). India remained the dominant export
• United States bullion imports reached a record high last partner, fueled by a 9% increase year-on-year to the
year, reflecting the strong increase in retail investment, highest level since 2008. Shipments to that country in
as well as a recovery in flows from Latin America due to 2015 represent 83% of all the silver exported from Britain,
increased mine production. boosted by strong Indian demand with the largest volumes
being shipped in March and September.
• Switzerland continued to lose out in its importance as the
global silver trading center last year, recording another year UK bullion imports registered an 18% fall to 120.6 Moz
of trading deficits. Many exporters redirected their silver (3,752 t), with most of the bullion coming from Kazakhstan,

SILVER BULLION TRADE

shipments to other countries instead. Sweden, Germany, Switzerland and Poland. Much of this
fall came from the drop in flows in April and August.
• Silver bullion imports to China increased significantly
in 2015, especially the second half of the year. While Swiss silver bullion imports in 2015 dropped by 42% to
the country’s industrial segment remained soft, the 20.0 Moz (626 t), the lowest level since 1982, the first year
depreciation of the yuan in August provided arbitrage for which we have data available. Despite this, exports
trading opportunities. only dropped fractionally to 66.5 Moz (2,069 t), leaving a
46.5 Moz (1,446 t) deficit. This points to strategic changes
EUROPE in global silver flows as well as acceleration in the decline
in the large stocks of silver held in Switzerland. From a
Europe (excluding Russia) is traditionally one of the longer-term perspective it’s possible to see that the trade
world’s main deficit regions as fabrication demand exceeds deficits of the last two years are important, but that the
mine supply and locally generated scrap. Fabrication of stock build from 2005-2012 and during the 1980s help to
industrial items, jewelry, silverware and coins rose by 4% buffer the alpine country from radical declines in imports.
to 132.2 Moz (4,111 t), while scrap supply fell by a marginal
1% and mine supply rose by 7%, to a total of 69.9 Moz Switzerland not only lost out from the complete cessation
(2,174 t). Therefore, Europe’s fundamental deficit increased of flows from certain countries but saw marked declines
from 18.8 Moz (584 t) in 2014 to 19.6 Moz (608 t) last year. from most major countries. Belgium redirected some of its

2015 UNITED KINGDOM BULLION IMPORTS 2015 MONTHLY UNITED KINGDOM BULLION IMPORTS

30 Kazakhstan Switzerland Total Exports

Germany Taiwan

25 Poland Japan
Sweden Others

20
Moz (calculated)

15

10

120.6 Moz (3,752 t) 0

Jan Mar May Jul Sep Nov
Source: GFMS, Thomson Reuters; HMRC Source: GFMS, Thomson Reuters; HMRC

45
 WORLD SILVER SURVEY 2016

silver bullion towards Brazil, Italy and the United States two years of growth. Sweden returned to being the largest
while Italian imports more than doubled, but were still supplier at 4.7 Moz (146 t). Shipments from Argentina
down 24% compared to 2013. Much of the decline in Italian recorded a 51% rise which was likely to be doré. Imports
exports in 2014 was made up by movements to Germany; from Poland fell by 22% countered by Austria and the
these largely dried up in 2015, leading to a resumption of Czech Republic with imports rising by 143% and 100%
previous movements. respectively.

Despite an increase in Argentine and Bolivian silver mine Germany’s exports showed an 11% decrease to 45.7 Moz
production, over the last two years exports have switched (1,422 t) last year. Almost half of the bullion went to the UK,
from Switzerland to the United States. A reason for this is although exports to this market were down 21% compared
likely to be competition with United States refiners seeking to 2014. The bulk of the remainder went to Austria where
higher market share. Exports to Switzerland from the demand for silver coins and bars was strong last year. At
major silver mining country Kazakhstan ceased in 2015. 3% of total exports, Estonia posted a considerable rise in
This abrupt change in flows at the end of a calendar year 2015 following a massive surge in 2014 after Ukraine crisis
was mirrored at the end of 2013 when Kazakhstan ceased sanctions were imposed against Russia. Other countries
exporting to Hong Kong and South Korea. The silver that took up considerable silver bullion from Germany last
SILVER BULLION TRADE

instead flowed to the UK, which captured over 99% of the year were the United States, Switzerland and France.
market share of Kazakh exported silver bullion, according
to Kazakh trade statistics. Following two successive years of growth, silver bullion
imports into Italy fell by 18% in 2015, to 21.7 Moz (675 t),
Though on the surface Swiss total exports may seem back to levels seen in 2013. Germany remained the largest
to be stable when compared to 2014, this belies great exporter, although its share of Italy’s total silver imports
changes in the underlying dynamic of trade in that country. dropped substantially last year, to 37% from nearly 60%
Movements to India more than tripled, with March alone a year earlier. On the other hand, Swiss share increased to
seeing 7.6 Moz (240 t), or 42% of the annual total, being 17% last year, from 12% in 2014. Meanwhile, Italy’s silver
shipped to the country from Switzerland. For the past few exports declined by 26%, to 9.7 Moz (301 t), with losses
years, the traditional route of Swiss silver going to India to most key export destinations. That said, shipments to
would be via the UK, in particular vaults in London, but Switzerland rose sharply last year, to account for nearly half
this seems to have tailed off, with the metal going direct to of total exports, as opposed to just 10% a year earlier.
India. The vast majority of Swiss silver that is exported to
the UAE and Nepal is bound for India ultimately. Russian silver bullion exports rose by 17% in 2015, to
29.3 Moz (912 t), largely driven by India, as shipments
Official German figures showed that bullion imports recorded to that destination increased by 23%. Meanwhile,
decreased by 17% in 2015 (to around 19 Moz (590 t)), after silver bullion imports dropped by a sharp 63%, triggered by

2014 SWISS SILVER EXPORTS 2015 SWISS SILVER EXPORTS

68 Moz (2,116 t) 66.5 Moz (2,069 t)

Source: GFMS, Thomson Reuters; Swiss Impex Source: GFMS, Thomson Reuters; Swiss Impex

46
 WORLD SILVER SURVEY 2016

the 61% decline in shipments from Italy, which accounted from Mexico fell to 108.1 Moz (3,362 t), down 3% last year.
for 89% of the Russian total silver imports. This drop is largely owed to a slowdown in mine production
growth in the country coupled with increased domestic
THE AMERICAS refining activities. Mexico exported 112.7 Moz (3,505 t)
of silver last year, down 4% from the previous year and
The United States imported a record high of 223.5 Moz marking the third consecutive decline in export volumes.
(6,952 t) of silver bullion and doré in 2015, a 22% increase
over the previous year. This double-digit rise follows a U.S. imports from Canada increased by 68% to reach
4% contraction in 2014. The increase was driven by a 67.3 Moz (2,094 t) last year. Much of this increase is owed
recovery in flows from Latin America and Canada. Imports to strong retail investment in the United States, which
from Latin America increased 9% last year, amounting to buoyed demand for coin, rounds, and bar products made in
137.0 Moz (4,263 t) and accounting for 61% of total imports. Canada. Canada exports nearly all of its silver bullion and
This recovery was driven by import growth from Peru (75%), doré to the United States.
Argentina (136%), Bolivia (34%), and Guatemala (875%).
These remarkable increases follow years of declines caused MIDDLE EAST AND INDIAN SUB-CONTINENT
by elevated concerns about potential exposure to money

SILVER BULLION TRADE

laundering and illegal mining activities. With regard to United Arab Emirates’s (UAE) market size in silver trade
Peru, the export ban put in place on illegally mined gold in is estimated to be approximately 5.8 Moz (180 t). A large
late 2013 resulted in a 13% drop in U.S. silver imports from part of this supply originates as secondary metal refined
the country in 2014, but flows have since resumed in 2015, from copper concentrates and the rest is byproduct from
largely because of an 11% jump in mine production. To a refining gold doré within UAE. The region was previously an
lesser extent, U.S. refiners also have recouped some market important hub for shipping silver of Russian and UK origin
share of the Latin American doré market from Indian to India. However, with large volumes of shipments to India
refiners, who offer competitive price terms. sent by sea from 2014, UK’s exports to UAE declined from
1.4 Moz (42 t) in 2013 to just 0.2 Moz (6 t) last year, while
In contrast to the double-digit growth in imports from Russian exports to UAE dropped from 5.1 Moz (160 t) to just
many of the Latin American partner countries, imports 1.2 Moz (36 t) for same time period.

MAJOR TRADE FLOWS IN SILVER BULLION TO THE UNITED STATES IN 2015

1.3 Belgium
7.9 Poland
Canada
1.2 Germany
67.3

5.4 United States

South Korea
108.1

Mexico

4.3 Guatemala

12.1 Peru

5.5 Bolivia

3.2 Argentina
Figures provided refer to “Moz of silver bullion“ and were
calculated using trade flow values and volumes.

Source: U.S. Department of Commerce; GFMS, Thomson Reuters

47
 WORLD SILVER SURVEY 2016

Turkey continued to see substantial silver bullion inflows INDIAN BULLION IMPORTS
in 2015. We estimate bullion imports (a combination of Moz 2011 2012 2013 2014 2015
fine silver, scrap, and mined doré) reached 9.2 Moz (286 t), Total Imports 132.4 61.8 187.1 220.0 255.7
a year-on-year increase of 9%. Imports were dominated Spot Price/kilogram 55,505 57,085 49,331 42,374 36,500
by flows from Switzerland, representing 62% of the total, ** Includes duty free and duty paid imports
with volumes rising a considerable 72% to 5.7 Moz (176 t). Source: GFMS, Thomson Reuters; Indian Ministry of Commerce

Inflows were also boosted by a material rise in supply

from, Morocco, Poland and Hong Kong. Exports also seven private agencies with 20% with the remaining
rose, by 31%, to an estimated 3.8 Moz (119 t) last year. one percent imported duty free for export purposes by a
Direct shipments to Nepal, Singapore and Italy saw a bank, fabricators of industrial products (five), and jewelry
considerable year-on-year increase, accounting for 69% of exporters (three). Taking a look at international suppliers, it
total exports. Shipments to India recorded another decline, took 18 suppliers, which include banks, refiners and trading
which, however, may well be routed through Nepal. houses, to supply the 256 Moz (7,954 t) last year. Out of
this it took only the top five suppliers, which were all banks,
Indian silver bullion imports reached a new record high to capture a market share of approximately 80%.
of 256.0 Moz (7,954 t), rising by 16% from the 2014 level.
SILVER BULLION TRADE

The 13% year-on-year decline in the average domestic Taking a look at regional delivery for end consumption,
silver price motivated fabricators and investors to build supplies were the highest to Ahmedabad with a 37%
inventories. Taking a look at the silver imports on a market share, followed by Delhi and Agra together at 24%,
monthly basis, volumes were highest in March at 34 Moz and Chennai in third position at 16%. It was interesting
(1,041 t), and for rest of the year averaged 20 Moz to note the rise in share of Chennai as a landing port,
(628 t). Also important to note is the source of supply of with its market share rising from 10% in 2014 to 25% last
fine silver obtained from doré, imported concentrates, year, while Delhi fell from 28% to 13% for same period;
and silver refined from lead mining. Supply from the first this change attributed to increased shipments by sea
two combined is estimated at 4.6 Moz (143 t) and from which later gets delivered to consumption centers by road
domestically mined as a secondary metal was 12 Moz and rail.
(374 t).
Supplies originated from 30 countries but from 49 different
Last year 26 firms imported silver compared to 33 in 2014 ports worldwide. The countries of origin for 80% of the total
and 78% of the consignments were delivered by ship as were United Kingdom, Switzerland, China, Russia, South
compared to 60% in 2014. Banks had the lion’s share of Korea, Hong Kong and Taiwan with the UK shipping 31% of
supply to the domestic market, and it required only six the total respectively.
banks to capture a market share of 57% followed by five
government nominated agencies taking a share of 22%,

2015 INDIAN SILVER IMPORTS 2015 MONTHLY INDIAN SILVER IMPORTS

United Kingdom Russia Others

40
Switzerland South Korea United States
China Hong Kong Hong Kong

30
Moz (calculated)

20

10

256 Moz (7,954 t) 0

Jan Mar May Jul Sep Nov
Source: GFMS, Thomson Reuters; Indian Ministry of Commerce Source: GFMS, Thomson Reuters; Indian Ministry of Commerce

48
 WORLD SILVER SURVEY 2016

EAST ASIA the growth in silver imports. Hong Kong was easily the
largest destination, receiving 99.5% of total exports from
The imports of silver to China discussed here consist of the mainland. For comparison purposes, previous export
metal inflows derived from base metal concentrates as volumes, particularly between 2006 and 2009, exceeded
well as the import of silver in bullion form. Base metal 128.6 Moz (4,000 t).
concentrates imports declined marginally last year,
easing by 2% to 242 Moz (7,515 t) of contained silver. The Due to the Value Added Tax (VAT) structure in China,
contraction of imports after several years of healthy gains various parties have tried to exploit loopholes, aiming to
reflected the country’s slowing economy. Imports of silver profit from arbitrage opportunities. While the Chinese silver
bullion, however, rose substantially, by close to 300% to price quoted on local exchanges is always trading at higher
a calculated volume of approximately 28.1 Moz (873 t). levels compared to the international benchmark, the local
Imports from Hong Kong and China’s Free Trade Zone silver price is inclusive of 17% VAT. Without the VAT, the
increased markedly, rising 20% and 79% respectively, Chinese silver price is actually lower than the international
and when combined, contributed 77% of total silver quotation. As a result, this has encouraged smuggling
bullion imports last year. For strategic reasons, including activities, and other practices to take advantage of the
propelling Shanghai’s status into an important global hub, price differential and this would be reflected in the official

SILVER BULLION TRADE

imports from China’s Free Trade Zone should continue imports and exports statistics.
to increase, and may become the dominant source in the
near future. Shipments from Australia and Switzerland, We believe one of the reasons why the imports and exports
China’s two largest sources of silver bullion in 2014, took a of silver bullion increased last year may be due to the
backseat last year to become the third and fourth largest arbitrage opportunities presented last year between the
contributors, though in volume terms supply from these onshore and offshore yuan exchange rates, particularly
markets still grew 17% and 7% respectively. during the second half of the year. After the Chinese
government officially depreciated the yuan currency in
Looking at bullion exports, after a modest 3% decline in August, the fluctuation between the CNY and the CNH
2014, Chinese silver bullion outflows increased 50% last rates increased immediately, with the cross rate as high
year, to 66 Moz (2,054 t), which was somewhat in line with as 1.0174 in September, compared to the daily average of

MAJOR TRADE FLOWS IN SILVER BULLION FROM HONG KONG IN 2015

2.3 Canada

3.7 Japan
China 7.7 0.8 South Korea

Nepal 1.8 Hong Kong

4.6 Taiwan
37.2

India 11.1

Thailand

0.8 Australia

Figures provided refer to Moz of silver bullion and were

calculated using trade values and volumes.

Source: Hong Kong Census & Statistics Department; GFMS, Thomson Reuters

49
 WORLD SILVER SURVEY 2016

0.9996 in 2014. For example, traders may pay an exchange Silver bullion imports into Japan dropped a modest 4%
rate against the dollar of 6.5 to import the bullion into the last year, to 50.2 Moz (1,560 t), with lower shipments from
country. They then can smuggle the same bullion out of the South Korea, Mexico, China and the United States driving
country, selling it to receive dollars. As the offshore yuan imports lower. South Korea remained Japan’s dominant
exchange rate is usually lower than the onshore rate, they silver supplier, increasing its market share from 90% to
then sell the dollars for yuan, say at an exchange rate at 93% in 2015. Japan’s silver exports more than doubled last
6.6, and thus making the difference between the two rates. year, to an estimated 1.7 Moz (54 t). Shipments to India
rose significantly, taking over a third of Japan’s total silver
Based on official trade statistics, silver bullion imports exports.
into Hong Kong decreased 35% to an estimated 27.0 Moz
(839 t) in 2015. China regained its position as Hong Kong’s Our analysis suggests that imports of silver bullion to
largest silver bullion supplier, with shipments equivalent Thailand enjoyed a healthy rise in 2015 to an estimated
to 18.7 Moz (583 t), while South Korea saw its shipments 29.9 Moz (930 t). This represents the highest level in
decreased 83% last year to 3.8 Moz (118 t). Meanwhile, five years and comes on the back of a return to stronger
exports fell 49% last year, to 74.3 Moz (2,312 t). India, which jewelry fabrication volumes. This growth was led primarily
dominates market share at 52% of the total, saw deliveries by a stronger jewelry export market as domestic demand
SILVER BULLION TRADE

slump 53% last year, to 38.9 Moz (1,208 t). remained moribund due to weak economic performance.
Imports from Hong Kong and China again dominated
Taiwan’s total silver bullion imports fell 84% last year, supply, at close to 50% of the total, with direct shipments
to an estimated 4.9 Moz (152 t). While China remained from the former providing the bulk of supply and enjoying
Taiwan’s biggest silver supplier, its market share dropped a 20% year-on-year increase. Imports from Switzerland
from 83% to 66% in 2015, with total shipments of remained the next largest source of supply enjoying a 64%
32.2 Moz (100 t). On the other hand, Taiwan’s silver increase over 2014 volumes to reach to 8.3 Moz (259 t),
exports fell 48% to 0.3 Moz (9 t). Exports to Hong Kong while shipments from Indonesia were also significantly
and Indonesia declined dramatically while shipments to stronger. Turning briefly to exports, reported bullion exports
Switzerland and South Africa both rose. The slowdown were down marginally last year, retreating by 9%, with
of the global industrial sector had a negative impact on India easily the largest market at 64% of the total.
Taiwan’s consumption of silver last year.

Singapore’s imports rose 21% to 4.7 Moz (147 t) last year.

Indonesia remained the dominant supplier, contributing MAJOR TRADE FLOWS IN BULLION FROM SOUTH KOREA IN 2015

72% of Singapore’s total silver imports. Meanwhile,

Singapore’s silver exports also increased 56% to 4.5 Moz
(141 t), with shipments to Thailand surging over 380% to
3.1 Moz (96 t), increasing its market share from 22% in
2014 to 68% last year. Shipments to India and Malaysia
China 1.0 South Korea 46.2 Japan
posted notable declines.

South Korea’s silver imports decreased 21% to 1 Moz (31 t)

last year, with China being the dominant supplier, taking 16.9 0.5 Taiwan

up approximately 94% market share. On the other hand, 11.2 Hong Kong
India
the country’s silver exports, driven by its refining industry,
5.7 Thailand
retreated 9% to 82.7 Moz (2,572 t). The slowdown of
industrial demand in several key markets, coupled with
competition due to currency depreciation from neighboring 0.4 Malaysia

countries, added to the weakness. Moreover, silver

Figures provided refer to Moz
demand from the domestic electronics sector decreased of silver bullion and were calculated
using trade values and volumes.
25% last year.
Source: Korea Customs; GFMS, Thomson Reuters

50
 WORLD SILVER SURVEY 2016

7. INDUSTRIAL FABRICATION
• World industrial fabrication totaled 588.7 Moz (18,311 t) were largely offset by lower demand for silver in electronics
in 2015, a 4% decline from the previous year. Weakened and electrical components, photographic papers, brazing
fabrication demand in developing countries outweighed alloys and solders and other miscellaneous applications.
almost non-existent growth in developed countries. While Japan and the United States recorded modest
increases in demand of 3% and 2% respectively, sizable
• Photovoltaic (PV) demand for silver totaled 77.6 Moz decreases in demand from China, Africa, South America,
(2,415 t) in 2015, a 23% surge from the previous year. This and to a lesser degree Europe, outweighed this growth.
marks the second consecutive year of increases in this
sector, driven by a recovery in growth from all three primary Industrial silver fabrication is heavily influenced by
markets after years of excess capacity, while growth was economic and industrial production growth. The global
particularly strong for Chinese solar panel installations. economy expanded by 2.4% in 2015, similar to growth
posted in the previous three years. While industrial
• Brazing alloy and solder silver fabrication declined in 2015, production expanded by an estimated 1.9% in 2015, the
by 5.0 Moz (155 t). The fall in demand was dominated weakest annual rate since 2009, a year in which global
by weakness stemming from China, the largest source of industry shrank. Based on data going back to 1990,
demand in this sector. there is a very strong positive (0.88) correlation between
the growth in silver industrial fabrication and industrial
• Demand for silver from the ethylene oxide (EO) industry production; therefore it is not surprising to record that
soared last year, to more than double to total 10.2 Moz silver fabrication weakened in 2015. However, the outright
(317 t), the highest level of demand on record. Over two decline in demand of 4% is perhaps better explained
thirds of the demand growth was accounted for by China. when looking at other factors, such as the slowdown in the
Chinese economy, in addition to ongoing thrifting.
• Declines in demand from electronics, photography, brazing

INDUSTRIAL FABRICATION
alloys and solders and other miscellaneous applications Focusing on China, its industrial production was recorded
amounted to 42.2 Moz (1,312 t), which outweighed the at 6% for 2015; this marks an 18% decline in growth from
19.7 Moz (612 t) increase in PV and EO demand. the previous year, with the country recording its lowest
annual growth rate since 2000. This significant slowdown
Industrial manufacturers used 588.7 Moz (18,311 t) of in the Chinese economy in 2015 has greatly affected
silver in 2015, down 4% or 23 Moz (700 t) from a year ago. domestic and international demand, with Chinese silver
Increases in photovoltaic and ethylene oxide (EO) demand industrial demand declining by 9% over the period to

INDUSTRIAL SILVER FABRICATION (BY CATEGORY) INDUSTRIAL PRODUCTION IN KEY SILVER-USING COUNTRIES

Ethylene Oxide Real Silver Price

800 Photography Photovoltaic 50 25 U.S. Japan
Brazing Alloys & Solders
20 China India
700
Industrial Production Index (% YoY)

40 15 World
600
Constant 2015 US$/oz

Other 10
Million Ounces

500
30 5

400 0

20 -5
300
-10
200
10 -15
100
Electrical and Electronics -20

0 0 -25
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Note: Photovoltaic in "Other" category prior to 2011
Source: GFMS, Thomson Reuters; Oxford Economics
Source: GFMS, Thomson Reuters

51
 WORLD SILVER SURVEY 2016

TABLE 5 - SILVER FABRICATION: INDUSTRIAL APPLICATIONS (INCLUDING THE USE OF SCRAP)

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Germany 26.1 27.6 27.4 20.3 26.5 25.4 21.7 21.3 20.9 20.9
United Kingdom 30.8 23.8 22.0 17.7 20.6 20.8 19.0 17.9 17.6 17.5
Russian Federation 21.7 22.2 21.9 18.7 20.3 19.4 19.1 19.2 18.2 16.6
Belgium 29.6 27.7 24.4 19.4 18.3 16.4 15.4 14.3 14.2 14.0
Italy 10.9 11.3 11.2 9.0 9.9 9.2 8.6 8.4 8.4 8.1
France 10.4 10.7 10.8 7.5 8.8 8.0 7.2 7.0 6.8 6.9
Czech Republic 2.1 2.4 2.7 2.1 2.4 2.6 2.8 3.0 3.1 3.1
Switzerland 2.5 2.5 2.5 2.2 2.4 2.4 2.3 2.3 2.3 2.3
Turkey 1.6 1.6 1.6 1.3 1.4 1.5 1.4 1.5 1.5 1.6
Netherlands 1.6 1.6 1.6 1.3 1.5 1.5 1.4 1.4 1.4 1.4
Spain 1.9 1.9 1.9 1.7 1.8 1.4 1.2 1.1 1.1 1.2
Poland 0.7 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.8
Austria 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Norway 0.6 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Sweden 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Romania 0.4 0.2 0.2 -0.1 0.2 0.2 0.2 0.2 0.2 0.2
Hungary 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Portugal 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Slovakia 0.1 0.1 0.1 0.1 0.1 0.0 0.1 0.1 0.1 0.1
Other Countries 0.4 0.4 0.4 0.2 0.2 0.3 0.3 0.3 0.3 0.3
Total Europe 142.3 136.3 131.0 103.3 116.4 111.2 102.7 100.1 98.3 96.1
North America
United States 153.2 149.0 149.5 124.4 151.2 166.4 132.7 127.4 123.8 126.7
Mexico 3.1 3.3 3.1 3.1 4.8 6.0 6.6 6.6 6.7 7.9
Canada 1.7 2.7 2.4 1.3 1.9 1.8 1.8 1.9 1.8 1.8
INDUSTRIAL FABRICATION

Total North America 158.0 155.0 155.0 128.8 157.9 174.2 141.1 135.9 132.3 136.3
Central & South America
Brazil 2.9 5.4 5.2 4.6 5.7 5.4 5.3 4.7 4.5 4.1
Argentina 1.5 1.4 1.0 0.8 0.9 0.9 0.9 0.9 0.8 0.8
Colombia 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.3 0.6 0.6
Other Countries 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Total C. & S. America 5.1 7.4 6.8 5.9 7.2 6.9 6.8 6.3 6.4 5.9
Asia
China 111.1 127.7 145.5 136.7 156.8 164.1 165.4 179.7 186.1 168.9
Japan 129.7 123.6 102.9 65.2 93.9 100.7 90.4 92.5 88.5 91.3
India 44.0 46.8 47.8 45.5 50.6 53.9 49.9 47.2 44.1 40.4
South Korea 22.3 24.1 25.9 19.7 24.5 24.5 23.6 22.3 20.4 15.4
Taiwan 13.6 16.7 16.6 12.3 15.1 15.8 14.3 14.6 15.1 14.5
Hong Kong 6.7 7.1 6.9 5.5 6.4 6.4 6.2 5.8 4.9 4.4
Iran 2.7 2.7 3.4 1.8 1.9 1.8 1.8 1.7 1.8 1.8
Singapore 0.0 0.0 0.0 0.1 1.8 1.9 0.5 0.7 0.8 1.6
Kazakhstan 1.8 1.9 1.9 1.6 1.8 1.7 1.7 1.7 1.7 1.5
Uzbekistan 1.8 1.9 1.9 1.6 1.8 1.7 1.7 1.7 1.7 1.5
Thailand 0.9 0.9 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Indonesia 0.6 0.6 0.6 0.5 0.8 0.8 0.9 0.8 0.9 0.9
Other Countries 3.2 3.2 4.3 8.4 7.6 4.9 2.3 2.3 2.5 2.5
Total Asia 337.7 356.5 358.2 299.4 363.2 378.4 358.8 371.3 368.6 344.9
© GFMS, Thomson Reuters / The Silver Institute

52
 WORLD SILVER SURVEY 2016

TABLE 5 - SILVER FABRICATION: INDUSTRIAL APPLICATIONS (INCLUDING THE USE OF SCRAP)

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Oceania
Australia 5.1 5.0 5.1 4.5 4.9 5.0 5.0 4.8 5.0 4.8
Africa
Morocco 0.3 0.3 0.3 0.2 0.3 0.3 0.3 0.3 0.3 0.3
South Africa 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other Countries 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Total Africa 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7

World Total 648.9 661.0 656.8 542.6 650.3 676.3 615.0 619.1 611.2 588.7
© GFMS, Thomson Reuters / The Silver Institute

168.9 Moz (5,252 t), marking the first annual decline in copper and copper/aluminium alloys in the case of silver
domestic demand since 2009 and the lowest level since based coatings. The continuous thrifting and substitution in
2012. Meanwhile, the reduction in silver per unit, referred various applications is in our view approaching a threshold
to as ‘thrifting’, remains a key driver in limiting demand level, as many other metals simply don’t share the same
growth in this industry; however it is certainly not as characteristics as silver, in turn reducing manufacturers’
significant a driver as in recent years. For example, the ability to thrift further without significantly compromising
average reduction to silver per solar cell in 2015 was 9%, the functionality of the applications. Fabrication of
a stark contrast to five years ago when it was measured at electronics, photography and other miscellaneous
20%. applications fell last year by 2%, but on the positive side an
increase in growth was recorded for brazing alloys and EO
Ethylene oxide (EO) demand was a bright spot within of 1% and 2% respectively.
industrial demand, expanding by an impressive 106% last
year, to total the highest annual demand level on record. Silver industrial fabrication in Germany remained flat
Solar demand provided further support, rising by 23%, last year at 20.9 Moz (651 t). Silver is used in a variety of

INDUSTRIAL FABRICATION
with solar demand now contributing 13% of total industrial applications such as light switches, brazing and alloys
fabrication, a material increase compared with 1% a decade and as part of several other miniaturized products in the
ago. automotive industry. Silver-based brazing alloys and
solders find a wide adoption in the so-called heating,
The photography sector continued its chronic decline in ventilation, air conditioning and refrigeration (HVACR)
silver demand for photographic papers. The 4% drop, applications. Demand for these household appliances is
however, was the slowest rate of decline since 2002. While big business in China, but in Germany increasingly not the
silver demand in electrical applications recorded its fourth
successive year of decline, returning to demand levels last EUROPE INDUSTRIAL FABRICATION
recorded in 2009. Demand for brazing alloys and solders Ethylene Oxide
also fell in 2015, by 8%. 150 Photography 110
Brazing Alloys & Solders
Industrial Production Index (2006=100)

Other EU Industrial Production

EUROPE 120

100
Million Ounces

European silver industrial demand fell by 2% last year 90

to 96.1 Moz (2,990 t), posting a fifth consecutive annual

fall. The drop was somewhat slower than in previous 60
90
years, which was mainly due to a rise in the number of
30
silver-containing items, lifting demand, but countered by Electrical & Electronics
a continuation in thrifting, which consequently pushed
0 80
net fabrication down. In addition, just like gold, silver has 2006 2008 2010 2012 2014
been subject to substitution pressures, replacing it with Source: GFMS,Thomson Reuters; Oxford Economics

53
 WORLD SILVER SURVEY 2016

case, particularly with regard to applications that contain This increase followed three consecutive annual decreases
silver-based solders and brazing. This is mainly a function in demand. Higher demand from the solar and ethylene
of substitution into other metals such as copper and zinc oxide industries accounted for most of the increase last
but also due to slower economic growth and consumer year, while reduced demand from the photography industry
spending on appliances compared to some developing and other applications curbed demand growth.
countries. In addition, and on top of various base metals,
plastics are being used in a broader array of applications, The largest source of industrial demand for silver in the
also in some cases supplanting silver. Therefore, despite U.S. comes from the electronics sector, which made up
the absence of significant pressures to reduce costs due to 43% of the total in 2015. Demand from this sector peaked
the lower silver price, thrifting and substitution continue to in 2010 at 74.6 Moz (2,320 t), but has been mostly flat over
persist with each new generation of products. the past three years. Electronics demand had been rising at
a rapid pace up to 2010, having increased at a compound
The 2% decline year-on-year in European photographic annual growth rate of 9% from 2001 to 2009. This trend
fabrication was the slowest decrease in thirteen years. broke down thereafter, however, largely due to a decline in
Belgium is the largest user of silver in photographic computer production. Global computer shipments peaked
applications within Europe and demand fell 1% in the in 2011 and were almost 30% below that peak last year.
country last year. Production is expected to continue to decline over the
next two to three years. Consequently, electronics demand
Italian industrial fabrication also recorded a 4% drop for silver is down by almost 30% from 2010. Demand for
reaching 8.1 Moz last year (250 t). The continued weakness this source totaled 53.9 Moz (1,677 t) last year, a modest
in the market was driven by a struggling underlying 0.3% increase over 2014. The gain occurred mostly in the
macroeconomic environment that restricts the country second half of the year, as printed circuit board shipments
from emerging from its structural decline since 2007. increased. Demand was also bolstered by healthy auto
Competition from other cheaper manufacturing regions, demand, which helped to offset declines elsewhere.
such as the Far East, has also intensified. Industrial
fabrication from Russia suffered an even bigger blow with The second largest source of industrial fabrication,
INDUSTRIAL FABRICATION

volumes declining 9% to 16.6 Moz (515 t) last year, as the accounting for 24% of the total, is silver powder produced
economy remained mired in recession. for the photovoltaics industry. Silver powder production
totaled 30.2 Moz (941 t) last year, up 11% from the previous
NORTH AMERICA year. This increase follows three years of double-digit
declines mainly due to market share losses to Japanese and
United States industrial silver fabrication increased to to a lesser extent Chinese powder producers. Last year’s
126.7 Moz (3,940 t) in 2015, up 2% from the previous year. increase, although market share losses curbed growth, was

US INDUSTRIAL FABRICATION US SILVER POWDER EXPORTS

US Industrial Production
Brazing Alloys and Solders Other
200 110 40
Photovoltaic Japan
Industrial Production Index (2006=100)

Other 35 China
Western Europe
150 30
Taiwan
100
Million Ounces

Million Ounces

25

100 20
Photography
15
90
50 10

Electrical & Electronics 5

0 80 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Note: Photovoltaic in "Other" category prior to 2011
Source: GFMS, Thomson Reuters; Oxford Economics Source: U.S. Dept of Commerce; GFMS, Thomson Reuters

54
 WORLD SILVER SURVEY 2016

driven by higher solar panel installations globally, which monthly ratings below 50 recorded in seven months
boosted total industry demand for silver. throughout 2015; meanwhile the Caixin manufacturing
PMI, which tracks orders of the more middle and smaller
Most silver powder produced for solar and other electrical sized companies, displayed an even more worrisome
applications in the United States is shipped to Taiwan, picture, with monthly readings below 50 for 11 months last
South Korea, and China, where paste is made and year. Both readings were implying the listlessness of the
subsequently fabricated into electrical components. country’s manufacturing sector, and hence affected its
Exports to these destinations dropped 23%, 3% and 22%, demand for industrial metals including silver. According
respectively in 2015. The relatively smaller decline in to official statistics, total electricity consumed by the
exports to South Korea reflects the dominance of powder manufacturing sector as a whole recorded a year-on-year
demand for solar applications. The United States ships decline in 2015, showing a drop in industrial activity.
powder to large paste makers and solar cell fabricators in
South Korea. Indeed, traditionally factories usually would let their labor
force go back to their hometowns for the Spring festival just
Silver usage in photography slipped 3.5% last year to total prior to the holiday (usually late January or early February).
14.8 Moz (459 t). Trends in this industry are discussed in Last year, however, some factories were already closed
greater depth in the photography section of this chapter. down and let go of their labor in December, showing the
Photography accounted for 12% of total industrial demand lack of orders and some factories were closing down early
in the U.S. last year, down from a peak of 45% in 2001. to minimize costs. The manufacturing PMI readings for the
first two months this year were suggesting the contraction
Silver use in brazing alloys and solders rose by 2.6% in of the industry continued, though the readings in March
2015, hitting its highest level since 2011 of 6.0 Moz (187 t). suggested the industry may have stabilized.
This rise was driven by an increase in the number of houses
being built. Housing starts rose by 10.7% last year, a larger While the electrical and electronics sector remained the
increase than the 7.8% in 2014. largest area of silver industry demand, silver use from
this sector declined 10% last year, to 69.9 Moz (2,173 t).

INDUSTRIAL FABRICATION
Silver demand from the ethylene oxide industry rose to A slowdown in growth in the global economy that
0.4 Moz (13 t), up almost threefold from the previous resulted in softer demand for electronics products, and
year. Crucial for this was one new ethylene oxide plant a migration wave that saw some companies reallocating
commissioned in the United States last year, which required their manufacturing base to the cheaper regions (mostly
a newly fabricated silver catalyst. The balance of industrial Southeast Asia), have all negatively impacted the country’s
fabrication totaled 21.4 Moz (664 t), which was a modest demand for the white metal.
drop of 1% from the 2015 level. Other applications include
antimicrobial, decorative items, medical and dental,
batteries and many others. Demand for decorative items GLOBAL SEMI-CONDUCTOR BILLINGS
was particularly weak, as the strengthening U.S. dollar
weighed on demand from tourists. 350
Other Asia/Pacific Americas

300 Japan
EAST ASIA Europe
Global Semiconductor Billing

250
(millions of USD)

Chinese silver industrial demand dropped 9% in 2015, to 200

168.9 Moz (5,252 t). It was the first annual decline since
150
2009, and the lowest level since 2012. Although China’s
GDP grew at 6.9% in 2015 based on official figures, the 100

true impact on the ground failed to reflect this robust

50
performance, particularly in the manufacturing sector. The
official manufacturing PMI, which tracks manufacturing 0
2006 2008 2010 2012 2014
activities of the larger sized enterprises in China, saw Source: SIA

55
 WORLD SILVER SURVEY 2016

In addition, the domestic property market continued to there was still 16.5 GW of solar power connected to the
suffer from an overhang of inventories, particularly in the grid last year, and bringing total installations to 43.3 GW,
third and fourth tier cities, with total commercial properties the largest user of solar power in the world. We expect the
available for sale throughout the country totaling Chinese solar industry to continue its upward momentum
719 million square meters at the end of last year, reaching into 2016, as the government officials have recently
a historical high. Total floor space under construction announced that the country plans to add 15-20 GW of solar
rose only 1.3% (compared to 10.4% growth in 2014), while power annually for the next few years. Regardless of the
housing starts decreased 14% in 2015. The difficulties that oil price, the desire to have more environmentally friendly
the property sector faced did not bode well for the usage of energy within the country, and to counter the economic
silver conductors, contacts, switches and fuses application. downturn, means the Chinese government has been very
supportive for the domestic solar industry, and will likely
Turning to silver brazing alloys and solder, demand fell remain so in the near future.
by 11% to 33.3 Moz (1,037 t) in 2015. According to China
Household Electrical Appliances Association, the country’s Silver usage in the Chinese ethylene oxide (EO) industry
production of refrigerators reached slightly less than rose by more than 67% to 6.7 Moz (209 t). The increase in
90 million units last year, a modest 1.9% year-on- demand was mostly due to a rise in EO production capacity.
year decline. This had a negative effect on demand for In 2000, the local production capacity of EO was only
refrigeration compressors, which is the primary application 885,000 t, but by the end of 2015 capacity increased to
of silver in home appliances. Production of air conditioners, 5,844,000 t, an increase of over 27% from a year earlier.
which had increased 11.5% in 2014, was only flat, remaining Seven EO plants in China were newly commissioned,
at 156 million units in 2015. Some of the decline in silver accounting for 52% of additional capacity globally, whether
demand from this sector, however, was partially offset in the form of new capacity or expansions. China’s demand
by the continual growth seen from the railway sector. for the EO derivative product Mono Ethylene Glycol (MEG)
China built more than 9,000 kilometers of new railroad far exceeds its domestic supply; therefore it has been
construction last year. During the period of economic importing MEG. The country’s strong demand for MEG
uncertainties, China will most likely continue to boost stems from accounting for 70% of the global production
INDUSTRIAL FABRICATION

infrastructure projects to keep the economy afloat. of polyester fibre in 2015, for which MEG is required in
the production process. This strong market position has
The Chinese photovoltaic industry continued to expand in driven the rapid development of EO capacity in the country,
2015, and was one of the few bright spots that saw demand particularly within the past decade. Newly commissioned
for silver from the country actually increase. Chinese solar domestic EO capacity will continue to account for a large
cell production reached 41.9 GW last year, a 47% year- portion of silver demand from the EO industry in the
on-year increase. Despite falling short of the initial target, medium term.

CHINESE INDUSTRIAL FABRICATION Japanese industrial demand rebounded in 2015 rising by

Photovoltaic China Industrial Production 3% to 91.3 Moz (2,839 t). The annual increase may surprise
200 Brazing Alloys & Solders Ethylene oxide 250 given the state of the Japanese and global economy but
Other
Photography the modest rise was entirely the result of significant gains
Industrial Production Index (2006=100)

200 in the production of silver powder with all other industry

150
segments materially weaker. There were a number of key
Million Ounces

150 reasons behind the contraction in offtake for the other

100 segments. First, domestic consumer spending remained
100 weak, as evidenced by poor demand for electronics
50
products and household appliances. This was in turn the
50
Electrical & Electronics result of the country’s ongoing struggling economy which
saw Japan slip back into recession in the second and third
0 0
2006 2008 2010 2012 2014
quarters, amid a reduction in business investment and a
Note: Photovoltaic in "Other" category prior to 2011 meek global economy. Japan’s economy contracted further
Source: GFMS, Thomson Reuters; Oxford Economics

56
 WORLD SILVER SURVEY 2016

JAPANESE NON-PHOTOGRAPHIC NITRATE & CONTACT PRODUCTION

in the final three months of 2015 as the nation struggled to

break free of a cycle of expansion and contraction despite (million ounces) 2011 2012 2013 2014 2015

more than three years of the Abenomics program. For the Non-Photo Nitrates 5.1 1.2 1.1 1.1 1.0

full calendar year 2015, Japan’s economy expanded just Contacts 4.0 3.4 3.9 2.1 2.0
Source: GFMS, Thomson Reuters
0.4%, as a 2.7% increase in exports helped offset a 1.2%
drop in private consumption.
15.2 tn yen (US$128.6 bn) in 2015, making the United
A secondary impact on offtake has been the weaker export States Japan’s largest export market.
trade in some industry segments and while the weaker yen
assisted fabricators in a competitive global market weaker Turning to individual sectors’ performance, the electrical
demand in regional markets dragged fabrication volumes and electronics sector fell by 9% to 30.4 Moz (945 t).
lower. Japan recorded a trade deficit for the fifth straight Demand for silver nitrates, (excluding the photographic
year in 2015, but the deficit narrowed by 78% over 2014 as industry, which edged 5% lower after appearing to have
lower oil prices pushed down import costs and a weaker stabilized after material falls over the last decade),
currency helped spur a modest increase in overall exports. recorded a double digit decline despite stronger automobile
Moreover, Japan’s trade balance swung to a surplus in demand offset by a sizable drop in other industrial
December, as an 18% annual drop in imports offset the 8% applications. This trend was widespread with demand for
drop in exports. silver used in contacts, connectors, and switches (the back
bone of the industry) retreating considerably.
The slowdown in emerging economies, especially in
China, was more pronounced in 2015, and that affected As outlined earlier, silver powder production used in the
Japan’s exports and production. Exports of high technology photovoltaic industry recorded impressive gains in 2015,
products have been the engine room of Japan’s economic helped by continued robust demand on the domestic
growth since 1960. Indeed exports account for around 17% front and stronger export orders. This segment has
of total GDP. Production of consumer electronics declined exploded over the last two years as part of an ambitious
4% in 2015 according to Japan Electronics and information national effort to promote renewable energy and cut

INDUSTRIAL FABRICATION
Technology Industries Association (JEITA), while industrial the nation’s dependence on nuclear energy after the
electronic equipment held broadly flat. Perhaps of greater Fukushima incident. The rapid expansion in China has also
concern to the industry was the 6% decline in exports of necessitated an expansion in Japanese production. Since
consumer electronics, with this decline following a more 2012, the Japanese government has implemented a feed-in
precipitous fall of 14% in 2014. In 2015, Japanese total Tariff (FiT) for electricity generated from renewable energy
exports to China fell 1.1%, to 13.2 trillion yen (US$95.8 bn). with new PV module production exceeding 9 GW last year
However, exports to the United States rose 11.5% to (addressed in greater detail on page 65).

JAPANESE INDUSTRIAL FABRICATION JAPANESE SILVER POWDER EXPORTS

Japan Industrial Production

140 110 60
Other
Other
Industrial Production Index (2006=100)

Photography
120 50 Europe
Brazing Alloys & Solders
100 Taiwan
100
40 South Korea
Million Ounces

Million Ounces

80 Puerto Rico (US)

90 30
60
Photovoltaic
20
40
80

20 10
Electrical & Electronics

0 70 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Note: Photovoltaic in “Other” category prior to 2011
Source: GFMS, Thomson Reuters; Oxford Economics Source: GFMS, Thomson Reuters

57
 WORLD SILVER SURVEY 2016

Offtake in the brazing alloys and solders sector also were to the Chinese Mainland, which increased a mere 1%.
declined last year by an estimated 6% to 1.9 Moz (59 t) as Meanwhile, exports to the EU region registered a more
weaker domestic demand coupled with a cooling export healthy growth of 7%. In value terms, exports of domestic
sector dragged silver consumed lower in these segments. production fell 10% year-on-year, a big improvement from
Elsewhere, silver used as a catalyst during the production 2013 and 2014, when 30% and 23% annual declines were
of ethylene oxide dropped by close to half in 2015. Indeed, registered respectively. We expect this declining trend to
while there was no newly installed capacity in Japan in continue in 2016, however.
2015, replenishment of silver for existing facilities was
estimated to have retreated from the very low level of the South Korean industrial offtake fell 25% in 2015 to an
year prior. estimated 15.4 Moz (480 t), the lowest level since 2001.
The drop last year was due to a combination of a worsening
Industrial fabrication in Hong Kong is estimated to have domestic economy, some relocation of production to other
eased by 10% in 2015 to reach 4.4 Moz (137 t), in part due Southeast Asian countries, and a more competitive global
to some relocation of production to other Asian countries. electronics market. The Bank of Korea cut interest rates
Hong Kong’s electronics industry is the largest merchandise in June last year, during the outbreak of the Middle East
export earner for the territory, accounting for 64% of Hong Respiratory Syndrome (MERS) to an historical low of 1.5%.
Kong’s total exports last year. A substantial portion of such
exports, largely re-export business, are regarded as high- The South Korean HSBC/Markit Manufacturing PMI, which
tech products, including telecommunications equipment, tracks the domestic manufacturing activities, had eight
semiconductors and computer items. Hong Kong’s total months in 2015 with a reading of below 50 – indicating the
electronics exports increased 2% in value terms last year, Korean industrial sector was contracting. Indeed, the PMI
mostly due to the positive contribution from the re-exports reading was just 46.1 in June, the lowest since 2012. The
segment. During the year, 63% of total electronics exports PMI readings for the first three months this year were also

TABLE 6 - SILVER FABRICATION: ELECTRICAL AND ELECTRONICS (INCLUDING THE USE OF SCRAP)
INDUSTRIAL FABRICATION

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China 44.7 53.6 60.9 55.4 66.2 69.1 69.5 75.3 77.8 69.9
United States 55.0 57.7 62.2 53.4 74.6 67.0 56.1 53.1 53.8 53.9
Japan 46.0 44.8 38.7 28.2 51.1 46.2 38.4 38.3 33.6 30.4
Germany 19.7 21.4 21.7 15.7 21.3 20.3 17.2 17.0 16.7 16.7
India 10.8 14.1 15.0 16.1 17.1 17.2 17.6 15.1 16.1 14.5
Taiwan 10.3 11.7 12.3 9.9 12.1 12.7 11.3 11.8 12.3 11.8
South Korea 13.8 14.7 15.9 12.5 16.1 16.0 15.5 14.6 13.3 10.0
Russian Federation 11.5 12.1 12.1 10.3 11.3 10.9 10.7 10.9 10.1 9.2
Mexico 2.0 2.1 2.1 2.2 3.8 5.0 5.7 5.7 5.8 6.9
France 8.2 8.5 8.6 5.7 6.9 6.1 5.3 5.3 5.1 5.2
United Kingdom 4.4 4.5 4.7 3.4 3.9 4.0 3.9 3.9 4.0 4.1
Italy 3.6 3.9 4.1 3.4 3.9 3.3 2.8 2.5 2.4 2.3
Hong Kong 3.3 3.5 3.3 2.7 3.1 3.1 3.0 2.8 2.3 2.1
Czech Republic 1.0 1.1 1.3 1.0 1.2 1.3 1.4 1.4 1.5 1.4
Brazil 0.9 1.5 1.5 1.2 1.6 1.6 1.6 1.5 1.5 1.3
Turkey 1.0 1.1 1.1 0.9 0.9 1.0 0.9 0.9 1.0 1.0
Kazakhstan 1.1 1.1 1.1 1.0 1.1 1.0 1.0 1.0 1.0 0.9
Uzbekistan 1.1 1.1 1.1 1.0 1.1 1.0 1.0 1.0 1.0 0.9
Australia 0.7 0.7 0.7 0.6 0.7 0.7 0.7 0.7 0.7 0.7
Other Countries 3.3 3.3 3.3 2.7 3.3 3.2 3.1 3.3 3.4 3.5
World Total 242.3 262.5 271.7 227.4 301.2 290.8 266.7 266.0 263.4 246.7
© GFMS, Thomson Reuters / The Silver Institute

58
 WORLD SILVER SURVEY 2016

below 50. Another signal of the weakness of South Korea’s INDIA

economy can be seen in its export volumes. For the full year
2015, Korean exports fell 7.9%, the steepest decline since Indian industrial fabrication was down by 8.5% to
2009 and the first annual fall in three years. What is more 40.4 Moz (1,256 t), the lowest in a decade. In essence the
concerning is that the decline in exports seemed to have industrial segment consumed approximately 14% of silver
accelerated, with the December reading falling 13.8% year- supplies, which includes imports, domestically refined and
on-year, and retreating over twelve consecutive months. scrap. The macro-led factors, tight liquidity and increasing
Korea’s exports continued to tumble in the first three competition from China were a primary reason, sharp
months of this year, although there was some improvement reduction in exports exacerbated the fall, more particularly
in March. in the electrical and electronics segment.

One of the major drags on Korea’s economy is China’s The electronics sector consumed 14.5 Moz (451 t) last
slowing economic growth. China’s economy slowed year, the lowest in eight years. This sector contributed to
down considerably last year, and it certainly affected 36% of the consumption in the industrial segment. The
orders to the Korean factories. China took up a quarter of offtake from silver contact exporters declined sharply.
Korea’s total shipments annually, and Korea’s exports to Silver contact fabricators from unorganized trade have
China fell 5.6% in 2015. Another issue that many Korean been shipping silver strips for many years; this was done
manufacturers point out is that the domestic industry was to ensure higher turnovers and bag genuine orders despite
being dragged down by currency depreciation initiated by being a costly practice. Such practices ended, however,
neighboring countries. Against the dollar, the Korean won margins were under pressure with receding global demand.
depreciated 10.5% from 2013 to 2015, while the Japanese
yen depreciated 38.7% during the time span. The electrical contacts market, largely influenced by
demand from the LV switch gear sector, shrank despite
Taiwan’s industrial use of silver is estimated to have growth in power transmission lines, which grew at a
decreased by 4% last year to 14.54 Moz (452 t), 13% below monthly average rate of 2,338 circuit kilometers (ckm) per
the peak seen in 2007 and back to the level of 2013 after month as against 1,481 ckm per month in 2014. This was

INDUSTRIAL FABRICATION
a slight recovery in 2014. This recession was mostly a because a large part of consumption was catered for from
combined result of weaker exports and sluggish domestic inventory carried over from 2014 as the delay in execution
economy. Taiwan’s economy grew at its slowest pace in of projects had led to excess inventory, thus it was largely
2015 since the global financial crisis battered the country a delivery of backlog orders. Additionally, poor offtake
in 2009, with GDP rising by only 0.9% last year. The from the oil and gas industry due to sluggish growth has
local industry was negatively affected by the lukewarm had a material impact on the order books of electrical
global economy, as total exports in 2015 fell by 10.6% contacts and electroplating industry. Substitution is also
from a year earlier, the biggest annual drop since 2009.
Taiwan’s exports of electronic control devices, the gauge INDIAN INDUSTRIAL FABRICATION
for global technology product demand, dropped by at
Photography India Industrial Production
least 15% in 2015, pulling down the demand for silver in 60 160
Brazing Alloys & Solders
the local electronics sector. Feedback from electronics
Industrial Production Index (2006=100)

50 150
manufacturers said they have cut working hours over the
Chinese New Year holiday in 2016, due to the overcapacity 140
40
Million Ounces

resulting from declining demand. Other 130

30
120
We estimate that demand for silver from the local electrical
20
and contacts industry was down by 4% to 11.8 Moz (368 t) 110

in 2015. Silver demand from the local photovoltaic industry, 10

Electrical & Electronics 100
however, thanks to the strong demand from China, saw a
0 90
stellar growth of 23%, which made up for part of the loss in 2006 2008 2010 2012 2014
Taiwan’s silver industrial demand. Source: GFMS, Thomson Reuters; Oxford Economics

59
 WORLD SILVER SURVEY 2016

SILVER ETHYLENE OXIDE CATALYST MARKET Ethylene oxide prices declined drastically averaging 18%
lower in the United States and 12% lower in Northwest
Ethylene Oxide (EO) is a critical raw material in the production Europe, according to ICIS prices. This price drop was due to
of products like antifreeze, polyester, and detergents. In the a combination of capacity exceeding demand and lower cost
past decade, EO capacity growth has averaged 2.4 percentage production boosting price competition among market players,
points higher than global economic growth. This faster similar to trends seen in the oil market. The long term above-
rate of growth is primarily owed to above-trend growth in trend growth in demand for polyester, however, is expected to
polyester demand, which is made from an EO derivative called remain intact, which will continue to drive capacity growth in
monoethylene glycol (MEG), particularly from the textile the EO industry.
industry. Most ethylene oxide is used to produce MEG (around
67%), while the balance is used to make other EO derivatives Last year, silver demand from the EO industry totaled
like ethoxylates, DEG, and ethanolamines. Polyester demand 10.2 Moz (317 t), just over double the 5.0 Moz (154 t) of demand
accounts for about 59% of EO demand and is used to make in 2014. This was the highest level of demand on record from
fibers for the textile industry, plastic bottles, and films in food the industry. Of the 10.2 Moz, 10% was replacement demand
packaging and thermal insulation applications. for existing capacity. By the end of 2015, 137.5 Moz (4,277 t)
of silver were sitting in EO plants globally, which represents
Polyester fiber, which is used in textile products like apparel about 16% of mine production annually. China accounted for
and carpeting, accounts for an estimated 36% of ethylene 66% of demand last year. New plants were also commissioned
oxide demand at present, making it the largest source of end in Singapore and the United States last year.
product demand for EO. This share has been growing, as
polyester’s share of textile demand has increased significantly Seven EO plants in China were newly commissioned,
over the long term. According to PCI Fibres, polyester’s share accounting for 52% of additional capacity globally, whether in
of the textile market increased from 22% in 1990 to 54% in the form of new capacity or expansions. China’s demand for
2015, while all other fibers lost market share in the period. the EO derivative product MEG far exceeds its domestic supply;
Polyester’s share has grown as changing consumer preferences therefore it has been importing MEG. The country’s strong
have favored the fiber’s water resistant and durable demand for MEG stems from accounting for 70% of the global
INDUSTRIAL FABRICATION

characteristics. Additionally, polyester is very cost competitive production of polyester fiber in 2015, for which MEG is required
against its peers like cotton and is highly recyclable. According in the production process. This strong market position has
to IHS, while total fiber demand has grown at a 1.6 multiple driven the rapid development of EO capacity in the country,
of GDP growth since 2000, polyester demand has expanded particularly within the past decade. Newly commissioned
at 2.6 times the rate of GDP growth. Polyester is expected to domestic EO capacity will continue to account for a large
retain and grow its market share in the fiber industry and be portion of silver demand from the EO industry in the medium
the primary driver of fiber demand growth in the future. term.

GLOBAL SILVER EO DEMAND LOCATION OF SILVER INSTALLED IN EO FACILITIES IN 2015

12 Other 80 Other
US EO prices (RHS)
14% North America
10 China 19%
70
United States Middle East,
8 excl
60 Saudi Arabia
Million ounces

6 8%
US$/lb

4 50

2 China
40 Saudi Arabia 22%
0 16%
30
-2
2

-4 20 East Asia* EU-28

2000 2003 2006 2009 2012 2015 World Total: 162.3 Moz 14% 7%
*excl China
Source: ICIS via Eikon; GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

60
 WORLD SILVER SURVEY 2016

NEW AND GROWING SOURCES OF DEMAND FOR all too familiar with respect to silver usage. Physical objects
SILVER are embedded with sensors, which connect with computers.
A portion of these sensors is currently fitted with printed silver
New uses for silver are numerous, while large-scale adoption circuitry, and this portion is expected to grow considerably in
of silver in mass market applications are few and far between. the future.
The photovoltaic industry is the most recent example of large-
scale adoption of silver; however this industry’s usage of the According to Gartner, a technology consultancy, approximately
metal is slated to grow at normalized rates in the future. Silver 3.9 billion connected things were in use in 2014. This number
has proved to be the optimal material in photovoltaic cells is expected to increase to 25 billion by 2020, representing a
and the decision to use silver over other materials like copper 35% compounded annual rate of growth. Silver use in sensors
is determined by the balance among cost, compatibility, and has the most promising growth potential in applications for
efficiency. building automation, environmental monitoring, healthcare,
and smart lighting. One example of commercial-scale building
There are many existing applications currently driving fresh automation applications is Nest Thermostat, which contains
demand for silver due to changes in consumer preferences multiple sensors designed to “learn” your temperature and
or technological innovations in product design, albeit that humidity preferences over time and regulate accordingly.
those demand volumes are minimal at present. Silver is
competing with indium tin oxide (ITO) in transparent conductor Organic Light Emitting Diodes (OLED) is a flat light emitting
applications. Within this market, silver has gained favor in technology, composed of a series of organic layers between
applications where screens are becoming larger or where two conductors. OLED technology is used in displays and
flexibility’s role is becoming more significant. At this point in lighting products. While silver’s use in displays is minimal, use
time, it is highly uncertain if silver will increase its market share in lighting is significant and is a potential source of emerging
in this product meaningfully in the long term. commercial usage.

Silver is competing well against various chemicals and Silver busbars are used between electrodes in OLED lights
materials in antimicrobial applications. Particularly, silver’s to distribute voltage and improve efficiency, which is a key

INDUSTRIAL FABRICATION
use in textiles has grown exponentially. Active wear and competitive advantage to the technology. Today OLED
undergarments have driven usage for silver in clothing and lighting products are expensive, which is the main hurdle to
the mention of silver in these garments triggers a value- commercial-level adoption, but the efficiency features are
premium perception in the mind of the consumer. Silver is also attracting consumers. The lighting market is highly fragmented
carving out some market share in the wearables market, an though, so the scale of adoption is highly uncertain.
area that represents a bridge between two of silver’s largest
uses, electronics and jewelry. While watches are the dominant According to IDTechEx, the OLED lighting market is forecast to
wearable, companies are adding sensors to bracelets and reach $1.9 billion by 2025, from somewhere under
necklaces to more closely connect the consumer to their $200 million at present. Konica Minolta and LG Chem are two
devices. companies that have actively pursued commercial adoption of
OLED lighting. OLED’s main competitive advantage against
There are many industries in the infancy stage where silver other illumination products is that it is a surface light, and
could become the optimal material for usage on a commercial therefore can illuminate a large area. Large area lighting is
scale. These industries/applications include, but are not expected to see demand growth in hospitality and hospital
limited to, the “Internet of Things” and OLED lighting. settings where brightness and light emission are valued.

The “Internet of Things” is a technology concept that emerged Were the “Internet of Things” industry and OLED lighting to
around the turn of the century to describe data sharing take off, these could be potentially large sources of growth for
between physical objects through internet connectivity and silver industrial demand. Sizable volumes are not expected in
feeding this data into computer-based systems. Arguably, the immediate term though.
a precursor to the “Internet of Things” is radio-frequency
identification (RFID), a device with which the silver market is

61
 WORLD SILVER SURVEY 2016

TABLE 7 - SILVER FABRICATION: BRAZING ALLOYS AND SOLDERS (INCLUDING THE USE OF SCRAP)
(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China 19.4 21.3 25.9 26.6 28.6 30.5 31.4 34.7 37.6 33.3
United States 7.2 7.7 7.2 5.2 5.9 6.0 5.3 5.7 5.8 6.0
India 2.3 2.2 2.2 2.2 2.6 2.7 2.4 2.1 2.6 2.5
United Kingdom 3.1 2.4 2.3 1.8 2.3 2.4 2.2 2.1 2.2 2.2
Germany 3.4 3.6 3.4 2.3 2.8 2.8 2.3 2.2 2.1 2.1
Japan 3.9 4.0 3.7 2.3 3.4 3.0 2.5 2.3 2.0 1.9
Russian Federation 1.9 2.0 2.0 1.7 1.9 1.8 1.8 1.8 1.8 1.6
S Korea 2.0 2.4 2.6 2.1 2.3 2.4 2.2 2.1 1.9 1.6
Canada 1.5 2.4 2.2 1.1 1.7 1.7 1.6 1.6 1.6 1.6
Italy 2.4 2.5 2.4 1.7 1.8 1.7 1.6 1.5 1.5 1.5
Switzerland 1.4 1.4 1.4 1.2 1.3 1.3 1.3 1.2 1.3 1.3
Taiwan 1.2 1.3 1.2 1.0 1.2 1.3 1.2 1.2 1.1 1.1
Brazil 0.8 0.8 0.8 0.9 1.0 1.0 1.0 1.0 0.9 0.8
Australia 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.5
France 0.8 0.9 0.8 0.5 0.6 0.6 0.5 0.5 0.5 0.5
Belgium 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.5 0.5 0.5
Mexico 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Spain 0.6 0.6 0.6 0.6 0.6 0.5 0.4 0.4 0.4 0.4
Other Countries 1.0 1.1 1.2 1.0 1.3 1.3 1.4 1.4 1.4 1.4
World Total 54.7 58.3 61.6 53.6 60.9 62.7 60.6 63.2 66.1 61.1
© GFMS, Thomson Reuters / The Silver Institute

playing a role, with the introduction of copper graphite to execute the project. Increased solar panel installation
based electrical contacts that are now replacing the silver hasn’t led to an increase in consumption of silver in India;
graphite contacts used in miniature circuit breakers (MCB). this is because panels are still largely imported. There are
Silver’s quality of electrical resistance continued to help lift just two firms who are involved in large scale production,
INDUSTRIAL FABRICATION

offtake in residential electrical systems as a contact in MCB. and again silver paste is imported; supplied by fabricators
However, this demand was supplied through imported located in Japan, Russia, Taiwan, South Korea, and the
fine silver strip which primarily originated from the United United States.
Kingdom and United States.
The demand for silver in the usage of food category saw
The solders and brazing alloy sector, which contributes 6% lower offtake from fabricators of silver foil (varak), primarily
of the consumption in the industrial segment declined by related to higher inventory carried over from the previous
6% year-on-year. Fabrication volumes declined as there year. The end consumption volumes were, however, as
were delays in the execution of projects in infrastructure much as 2014. That said, higher price expectations have
and a slowdown in the real estate sector. Additionally, we led to stocking as prices declined. Increasing awareness of
have noted an increased dependence on imported brazing nutritional purpose and health benefits of silver continues
alloys by the refrigeration industry. Demand for silver to be a key driver; however, its growth in volumes will be
sputters by architectural glass manufacturing companies dependent on a shift from low quality products. Another
was catered for by importing from the United States. category of importance is jari (silver thread), which
increased. However, the volumes are still one-third of the
Last year India installed nearly 2 GW of solar powered 2005 peak. The gains last year were largely attributed to
plants, of which more than three-quarters are estimated an increasing customer base in modern fashion and not just
to be connected to the grid and the rest were rooftop traditional attire.
installations. With last year’s addition, total installed
capacity has now crossed 5 GW. The speed is snail’s pace
given that the 2022 target is 100 GW. The slowing growth
is partly attributed to bidding of lower unit rates, but failing

62
 WORLD SILVER SURVEY 2016

TABLE 8 - SILVER FABRICATION: PHOTOGRAPHIC USE (INCLUDING THE USE OF SCRAP)

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
United States 46.4 34.4 28.1 23.4 20.2 17.9 16.8 16.0 15.3 14.8
Belgium 28.3 26.9 23.5 18.6 17.4 15.5 14.4 13.6 13.5 13.3
Japan 40.2 34.7 29.2 19.6 15.0 13.2 9.7 9.5 9.3 8.8
United Kingdom 18.4 11.8 9.9 8.6 9.0 9.4 8.4 7.4 6.7 6.5
China 5.0 4.6 3.7 3.1 2.6 2.4 2.2 1.9 1.8 1.6
Russian Federation 2.4 2.1 1.8 1.5 1.4 1.2 1.2 1.1 1.1 1.0
India 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Brazil 0.0 1.4 1.3 1.0 1.4 1.2 1.1 0.5 0.3 0.2
Czech Republic 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Australia 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other Countries 0.8 0.4 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total World 142.2 117.0 98.2 76.4 67.5 61.2 54.2 50.5 48.5 46.7
© GFMS, Thomson Reuters / The Silver Institute

PHOTOGRAPHY played within the silver market, it is worth reviewing the

impact the digital revolution has had on this sector. Within
• Demand for silver used in photographic applications the last decade demand from this segment has fallen by
declined by 4% last year, the slowest rate of decline since almost a third or 95.5 Moz (2,970 t). In 2015, photography’s
2004. share of total silver physical demand stood at just 4%,
compared to 15% in 2006, with photography’s share in
Global photographic demand for silver fell by just 4% 1980 exceeding 50% of total demand.
in 2015, settling at 46.7 Moz (1,452 t). Although this
marked the lowest total recorded in our data series, it The rapid decline in the use of silver in this segment has
was nonetheless the lowest percentage decline since almost entirely been at the hands of the shift to digital
2004. The modest contraction followed a similar decline applications, with this technology eroding the use of

INDUSTRIAL FABRICATION
in 2014, reflecting the fact that the bulk of structural silver halide in most of the core demand segments. While
change in the photography market is behind us and that demand for consumer photographic film and paper
current fabrication volumes may be largely sustainable continued to see significant falls last year, demand from
looking forward. Indeed, there are new technologies that within the medical/healthcare system looks to have found
in the coming years may even lead to a return to growth a floor, with industry contacts suggesting that demand
within this segment. To place the long term decline into from the developing world for the more cost effective wet
perspective and the importance that this sector previously chemical X-ray system is close to offsetting the migration

WORLD PHOTOGRAPHIC FABRICATION DIGITAL AND FILM CAMERA SALES

Re-usable Film Camera Sales

150 160 30

Other
Re-usable Film Camera Sales (millions)
Digital Still Camera Sales (millions)

China 25
120
Japan 120

United States 20
Million Ounces

90
Europe
80 15

60
10
40
30
5

0 0 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: Photofinishing News Inc.; GFMS, Thomson Reuters

63
 WORLD SILVER SURVEY 2016

to digital applications in more advanced economies. In Japanese offtake fell by 5% to 8.8 Moz (275 t) last year,
addition, demand for industrial X-ray used for the testing the third successive year of moderate single digit declines.
of support beams used in construction, bridges and This, in contrast to the 2008-12 period, where the average
evaluation of welds and in testing metal plates has also annual fall was in excess of 20%. Demand for photographic
steadied after precipitous falls in the early years of digital. film, for amateur and professional use, saw another
material fall last year, dropping over 30%, although
One area of the industry segment that is rapidly expanding from a low base after significant contraction over the last
is in touch screen flexible mesh technology where silver decade. There has been one bright spot with Fuji’s Instax
is increasingly being used. The touch panel sector, which instant film and cameras selling in record numbers and far
has been growing explosively over the past decade, outpacing the company’s digital cameras. The company
offers tremendous opportunities for new materials and estimates that it sold 5 million of the cameras in the fiscal
next-generation technologies. Earlier in the decade this year and that it will sell at least 6.5 million in the next
technology was dominated by the use of Iridium Tin Oxide year. Medical demand for wet chemical X-ray has broadly
(ITO), but recent years and notably 2015 saw significant stabilized, slipping only marginally, as developing world
inroads for the touch panel market as adoption of demand offset migration to digital applications.
non‑ITO films made of silver nanowire, silver mesh, silver
halide, and silver nano particles have been trialed and Demand for silver from the photographic sector in China
implemented on a commercial scale. To date, touch panels dropped by 13% last year to 1.6 Moz (49 t). Similar to
have been mostly employed for applications with relatively previous years, last year’s decline was largely related to
small screens, such as smartphones, tablet PCs, and car the continued structural decline following the introduction
navigation systems, but this is about to change with larger of digital applications. Photo kiosks where consumers can
devices such as all-in-one (AIO) PCs, and large notebook print images taken on smart phone or digital cameras
PCs expected to boost demand in the coming years. provided demand for photographic paper although this was
not sufficient to offset losses in the consumer film market
In the United States photographic demand retreated by 4% and other industrial segments. In the medical sector, silver
to reach 14.8 Moz (459 t), a similar modest decline to that use in X-ray declined only at the margin as the weaker
INDUSTRIAL FABRICATION

seen in the previous year. Demand for both photographic economy slowed migration to digital systems.
film and color negative paper offtake continued to dissipate
in 2015*, falling 8% and 16% respectively, with these losses
offset by a less severe contraction in the medical sector.
(*Source: Photofinishing News)

WORLD COLOR PHOTOGRAPHIC PAPER CONSUMPTION CONSUMER FILM SALES

1,400 1.8
Others
Others 1.6
1,200 Japan
Japan
1.4 Western Europe
Millions of Square Meters

1,000 Western Europe

Billions of Rolls/Disks

1.2 United States

United States
800 1.0

600 0.8

0.6
400
0.4
200
0.2

0 0.0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: Photofinishing News Inc. Source: Photofinishing News Inc.

64
 WORLD SILVER SURVEY 2016

ESTIMATED SILVER POWDER PRODUCTION FOR PV BY COUNTRY

PHOTOVOLTAIC
(million ounces) 2012 2013 2014 2015
Japan 24.5 28.1 28.4 37.3
• Demand for silver in the photovoltaic (PV) industry
United States 37.8 32.5 27.2 30.2
maintained its growth in 2015, following a 1% rise in 2014.
China 0.6 1.9 7.6 10.1
Silver offtake in this segment recorded a substantial gain, World Total 62.9 62.5 63.2 77.6
increasing by 14.4 Moz (448 t) or 23% year-on-year, to an Source: GFMS, Thomson Reuters
estimated 77.6 Moz (2,414 t), driven by stellar growth in
Chinese solar panel installations as well as its recovery from
years of excess capacity of solar module production. that has seen the industry expand at an average growth rate
of 53% over the last decade. Meanwhile, China, the world’s
Silver is most commonly used in the front and back contact in largest solar PV producer, saw its solar cell production surge to
solar cells in the form of paste, while the remaining demand 41.9 GW in 2015, followed by 9.4 GW of new capacity for Taiwan
comes from other parts of PV manufacturing such as electrical and 3.5 GW for Japan.
contacts and inverters. Given that demand for silver paste
accounts for a dominant proportion of silver used in solar Solar cell production had grown exponentially from 2005 to
industry, our evaluation of silver use in the photovoltaic market 2011, with an average growth rate of 67% per annum over this
primarily focuses on its consumption of metallization paste. period, with fabrication more than doubling in 2010. However,
In terms of paste for thick-film cell, which accounts for over the meteoric rise of solar cell production without a comparative
95% of total silver consumption in PV, the front-side paste is growth in demand, saw a massive build up of excess capacity
made up of 90% of silver, while the rear-side is 45% to 55% in the industry. Tensions had been raised with anti-dumping
silver, depending on production process. For each cell (which tariffs on China-made solar modules between the United States,
produces 4.2 W on average), the consumption of front-paste is the European Union and China. As such, solar cell production
about three times that of the rear-side. Under our methodology, growth halted in 2012, and the market had to digest the excess
fabrication is defined as the transformation from silver powder inventories thereafter. The market returned to impressive growth
to metallization paste for solar modules. As a precursor of silver in 2015, increasing 32%, led by generous government subsidies
paste, we calculated the production of silver powder allocated to which facilitated a sharp rise in installations, especially within

INDUSTRIAL FABRICATION
this industry as a reliable proxy for demand in PV. China. However, as the subsidies are expected to be adjusted
lower in the second half of 2016, Chinese manufacturers across
Silver powder production for the solar industry increased by the supply chain (from silver powder/paste to solar cells) are
23% year-on-year to in 2015, to 77.6 Moz (2,414 t), with growth rushing to expand their capacity to cater to the immediate
seen in all three primary markets. Japan maintained its position demand from domestic end-consumers, taking advantage of the
as the largest global producer for the second consecutive year, higher subsidy in the first half. As a result, overcapacity within
consuming 37.3 Moz (1,160 t) of silver, compared to 28.4 Moz the industry could resurface again later this year.
(883 t) in 2014. Production from the United States held firm,
rising by 3.1 Moz (96 t) or 11% last year, accounting for 39% of The price erosion in PV modules was mainly caused by huge
global demand, however, down from 43% in 2014. Meanwhile, overcapacity along the PV value chain in 2011 and 2012.
China, with its fast development in powder manufacturing Consequently, pressure on cells and module manufacturing
capability, raised its market share to 13%, up from 12% a year persisted for a number of years. Manufacturers sought to reduce
ago. Though the bulk of this production consisted of powder costs in a bid to catch up with the falling prices through two
used for back-side paste, the growth was also derived from that methods, firstly by improving solar cell efficiency and secondly
for front-side paste, indicating the potential for further growth. by lowering production costs. Higher efficiency solar cells were
the priority as they have the potential to reduce total costs
Strong growth in Japan’s powder production was partly derived per watt of electricity generated. Therefore, crystalline silicon
from its exports to Taiwan and the United States, with their modules (based on thick-film technology) are expected to
increasing demand for silver powder as the raw material in remain the dominant technology thanks to their relatively high
silver paste manufacturing, which was then exported to China efficiency and stability. This is a favorable development for silver
for solar cell production. Global solar capacity added another since the loadings per cell in thin-film cells have only 1% of the
55 GW last year (40 GW in 2014), the third consecutive increase silver in thick-film cells in general.

65
 WORLD SILVER SURVEY 2016

Silver loadings per cell remained on a downtrend in 2015, Energy Administration, China is planning to add another
dropping by 15% from the previous year to an estimated 15 GW of solar PV capacity in 2016, and is projected to reach
0.14g/cell. Given that silver paste only accounts for a small 143 GW of capacity by 2020 (its cumulative capacity is 43 GW
portion in the total cost (5%), there is not a great deal of as of 2015). However it remains to be seen if the Chinese
incentive for the industry to reduce silver paste consumption government implements any further supportive policies, as the
per cell due to a technical bottleneck; in other words, a further industry is highly dependent on subsidies due to its higher cost
reduction of silver will undermine the efficiency of the cells. compared with traditional power.

In terms of the influence from a technological development, Apart from solar cells, China could also play a more important
there are two major areas worthy of attention. PERC (Passivated role in powder manufacturing in the coming years. The
Emitter Rear Cell) solar cell, which increases cells’ efficiency technology development in producing silver powder used in the
from 20.0% to 20.4% (in most cases, 0.05 percentage points front and rear side of solar cells is expected to boost domestic
improvement should be seen as a higher level), is a promising silver powder production. Last year, China’s silver powder
one that has already been put into production; another is HIT annual production for the PV sector rose by 2.6 Moz (81 t) or
(Heterojunction with Intrinsic Thin Layer), which will double the 34% year-on-year, to 10.1 Moz (314 t).
consumption of silver in one cell while increasing the efficiency
to 24%, which means a rise of 20% in conversion efficiency when Furthermore, China domestic powder production is likely
compared to a traditional cell. Therefore, silver loadings per cell to have benefited from the reduction in capacity in Japan in
could be affected by these two developments. However, any early 2016. The decline of available supplies forced Chinese
improvement on conversion efficiency should be seen as positive downstream fabricators to turn to locally produced powder and
news for the solar industry, as it will strengthen solar energy’s paste, providing a big opportunity for domestic powder and
competitiveness with traditional fuels from a cost perspective. paste producers, who had suffered from both technological
inadequacies and trade barriers as new comers for years.
China, the world’s largest producer of solar cells, saw its As a result, we expect Chinese domestic powder production
production rise to 41.9 GW last year, representing 68% of global to expand by double-digits in 2016, with several producers
production. In the previous years, most of the products were signaling that they are now capable of producing powder with
INDUSTRIAL FABRICATION

exported to Japan, the United States and European countries; the required specifications used in paste for front-side of c-Si cell
however, with the support from the government on the fabrication.
expansion of renewable energy in the past year, the domestic
PV market also boomed. Its annual installations were estimated
at 16.5 GW for 2015; and although this failed to meet the
government’s target of 17.8 GW, it still represented more than a
50% increase year-on-year. According to the Chinese National

SILVER PHOTOVOLTAIC FABRICATION SILVER LOADINGS IN PHOTOVOLTAIC CELLS

70 80 0.6
Thin Film Estimated ‘Best-in-Class’ technology
Photovoltaic Cell Production (gigawatts)

60 70
0.5
Silver Fabrication (million ounces)

Thick Film Market average

Silver Fabrication 60
50
Silver Loadings (g/cell)

0.4
50
40
40 0.3
30
30
0.2
20
20

10 0.1
10

0 0 0.0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: Solarbuzz; Earth Policy Institute; ITRPV; GFMS, Thomson Reuters Source: GFMS, Thomson Reuters; ITRPV

66
 WORLD SILVER SURVEY 2016

8. JEWELRY & SILVERWARE

JEWELRY EUROPE

• A record performance from India, and an improving European jewelry fabrication remained broadly flat last
economic backdrop in western markets, helped lift jewelry year, at an estimated 34.8 Moz (1,081 t). This was due to
fabrication to an all time high of 226.5 Moz (7,045 t) in diverging performances across the region’s largest markets,
2015. which will be discussed in greater detail in this section.

• Indian jewelry fabrication jumped 16% in 2015 to a new Jewelry fabrication in Italy, the largest fabricating country
record, widening the gap over China, which recorded a in this region, was up 3% in 2015, to 18.4 Moz (572 t), the
marked decline. highest level since 2010. Last year’s growth was mainly
driven by higher exports, accompanied by a return to
• Chinese fabrication saw another sizable decline in 2015, growth in local consumption. That said, the uptick in silver
slumping 28% to 33.9 Moz (1,053 t) in 2015, driven lower by jewelry fabrication turned out to be less pronounced last
economic weakness and a drop in discretionary spending. year compared to the 12% growth a year earlier, due to
weaker-than-expected demand from the country’s key
Global jewelry fabrication edged higher in 2015, rising 1% export destinations.
to a new record level of 226.5 Moz (7,045 t). Even if modest,
this was the third successive annual increase and was As illustrated on the chart on the next page, Italian jewelry
achieved in spite of a sizable decline in Chinese fabrication exports registered a modest increase in 2015, with most
which was impacted by economic pressures and a drop in of the key regions posting gains. Shipments to the United
consumer spending. India widened the gap at the top of the States, Italy’s single largest export destination, rose by
leader board to record an impressive 16% annual increase 8% in 2015. This was largely thanks to lower silver prices
to easily surpass the previous record set in 2014 as lower and improving economic sentiment. It is worth stressing,
prices drove consumption levels higher. Changing fashion however, that growth in Italian silver jewelry exports to the
trends also made an important contribution, as the low United States had remained somewhat limited in the past
price point coupled with higher price expectations led to two years, compared for instance to the 11% growth in 2013.
rampant stock building. Elsewhere, an improving economy This could be partly explained by the slower rate of decline
helped lift North American offtake by 5%, while Thailand in the silver price last year compared to 2013, when a sharp
enjoyed a 16% jump in demand, boosted by a stronger drop was registered. Another interesting driver had been
export sector. Demand was broadly stable in Europe, while a growing interest among consumers in yellow jewelry as
the Middle East retreated 7%. gold prices continued to weaken.

WORLD JEWELRY AND SILVERWARE FABRICATION WORLD JEWELRY FABRICATION

Silverware fabrication Real Silver Price

300 60 250
Silver Jewelry fabrication Other
JEWELRY & SILVERWARE
250 North America
200
45
Constant 2015 US$/oz

200
Million Ounces

Million Ounces

150
Europe
150 30

100
100
15
50 Asia
50

0 0 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

67
 WORLD SILVER SURVEY 2016

The Middle East was another region that posted a gain; Silver jewelry fabrication in Germany contracted last year
shipments from Italy jumped by 12%, mainly thanks to by 1% reaching 3.3 Moz (102 t). Domestic demand remained
higher flows to the United Arab Emirates (UAE). Given the weak, hampered by competition for alternative materials
UAE’s cultural affinity for gold and its role as a trading hub and modern electronic devices. The trend was one of less
for the Middle East and North Africa, it is more likely to be extravagant designs and more filigree. Gold and silver-
a reflection of demand for silver jewelry in these regions. colored designs remained popular and silver jewelry was
Exports to Europe were up by 2%, but a closer look at the easily combined with other pieces. German fabricators,
constituent countries reveals that the performance was however, have witnessed increased competitive inflows
quite diverse. While in some countries demand for silver from abroad, particularly Thailand, which has tripled
jewelry was boosted by lower prices, in others it suffered shipments since 2011. Pandora has expanded production
from a recovery in gold jewelry offtake amidst the lower capacity in Thailand concentrating its fabrication base in
gold price. It is worth mentioning a sharp drop in exports the Asia Pacific region to serve global markets.
to Russia, which should not be viewed as a reflection of
weaker demand for silver jewelry, but rather a shift towards Turkish silver jewelry fabrication recorded an 8% drop to
domestically produced jewelry, as opposed to imported, 4.4 Moz (137t) last year driven by, among other things, a
which tends to be branded and more expensive, as is the general tougher macroeconomic environment. Turkish
case with Italian exports. fabricators have increasingly struggled to sell jewelry
domestically. Silver in Turkish lira recorded an average rise
Turning to silver jewelry demand in Italy, it is worth noting of 7.6% year-on-year. However, with strong competition
a few positive developments here. While silver continued domestically and abroad, margins have remained thin.
to benefit from substitution at the expense of gold at the Various initiatives to boost domestic brands are present
lower end of the market, anecdotal evidence suggests that through the government-initiated Turquality, for example, a
a shift away from non-precious jewelry towards silver has program that supports domestic brands abroad.
also been evident recently due to the lower price of precious
metals. Affordability, as well as growing popularity among Silver jewelry fabrication in Russia rose by 4% in 2015, to
younger consumers, driven by fashion trends, has seen an estimated 2.9 Moz (91 t), the highest since 2010. Despite
jewelry manufacturers, previously focusing predominantly a modest increase, last year’s outcome was quite upbeat
on gold, to introduce silver jewelry collections in their when compared to gold jewelry demand, which continued
shops. In addition, the economic hardship and a lack of to contract, marking the worst year since the 2008/09
ability to spend on luxury goods have led to a rise of so crisis. Silver jewelry continued to benefit from substitution
called bridge jewelry, which is mostly artisan-made using away from gold, particularly at the lower tier of the market,
silver, alloys and gold-plated silver, and is priced between in light of poor economic conditions and high gold prices
costume jewelry and more expensive fine jewelry. in rouble terms. That said, local demand for silver jewelry
was somewhat restricted as life had generally become
ITALIAN JEWELRY EXPORTS* more expensive, putting pressure on consumers’ disposable
incomes and hitting retail sales of jewelry. It is also worth
35 Others South America noting a partial shift in jewelry manufacturing towards
Middle East East Asia silver, at the expense of gold, in an attempt to maintain
JEWELRY & SILVERWARE

30
EU-27 factory production and not to lose qualified resources.
25 United States
Million Ounces

20 Jewelry fabrication in the United Kingdom in 2015 fell by

3% to 0.3 Moz (10 t), a decline that is marginally greater
15
than hallmarking data suggests. This partly reflects
10 the popularity of smaller pieces. It is not reflective of
5
consumption in the country though, which continued to
recover, albeit modestly. Instead, there is continued growth
0
2006 2008 2010 2012 2014
in demand for imported branded silver, of which a higher
Source: GFMS, Thomson Reuters
proportion is now hallmarked overseas.

68
 WORLD SILVER SURVEY 2016

In France, we estimate that silver jewelry fabrication Fabrication among all three countries increased at a
declined last year, contracting by 2% to reach its lowest healthy pace, with the United States accounting for 62%
level since 2008. While demand for silver jewelry has of total growth, followed by Mexico, which made up 33%.
been in decline for the last four years, the relative pace of The strong U.S. dollar helped boost fabrication in Canada,
declines has noticeably slowed. It is interesting to note that which saw 11.5% growth, to total 0.7 Moz (22 t), after
while the value of silver jewelry has risen, driven strongly declining 12% in 2014. The stronger U.S. dollar had less
by increased marketing from major brands over the last of a beneficial impact on growth in Mexico (3%) because
three years, total tonnage has been offset by a reduction Mexico’s export demand from the United States is a lower
in hypermarkets and basic silver products. Elsewhere share of its total exports (80%) compared to Canada (86%)
across Europe, demand was broadly weaker as economic and because domestic consumption was weighed down.
pressures limited discretionary spending. Poland saw The peso depreciated 16% against the U.S. dollar, resulting
fabrication volumes slip 11%, while Spain and Cyprus saw in a 4% increase in silver prices locally.
offtake dip 4% and 5% respectively.
Jewelry sales in the United States increased to an
NORTH AMERICA estimated 61.9 Moz (1,925 t) last year, up 8.3% from the
previous year. Silver jewelry growth was curbed because
North American jewelry demand increased to 31.1 Moz consumers were drawn to gold’s increased affordability.
(967 t) in 2015, up 5% from the previous year. Fabrication Silver particularly lost some favor within the higher-end
was revised to a higher base of 29.7 Moz (925 t) in 2014 segment of the market for this reason. That said the growth
relative to last year’s survey data, owed to an upward in silver jewelry consumption was largely driven by lower
revision to Mexico’s data. New information revealed a sticker prices, which encouraged increased purchases
more significant transfer than previously accounted for of pieces for gifting. Mother’s Day was a particularly
of offshored U.S. manufacturing facilities to Mexico in successful holiday for silver last year. In the two weeks,
recent years. The U.S. and Mexican jewelry manufacturing jewelry sales were 116% higher than average sales
industries are heavily interwoven, driven by lower labor levels, according to The Retail Equation, a research and
costs in Mexico and growing consumption in the United consulting company. Further, according to a market study
States. Mexico is now the largest jewelry fabricator in the commissioned by the Silver Institute’s Silver Promotion
region, surpassing the United States by 3.0 Moz (95 t) Service, gifting accounted for 34% of silver jewelry sales
last year. Mexico’s fabrication data for 2014 and 2013 were last year compared to 30% in 2014 and 25% in 2009.
revised from 8.5 Moz (264 t) in 2013 and 7.8 Moz (243 t) in
2014 to 15.2 Moz (472 t) and 16.3 Moz (505 t), respectively. Jewelry imports to the United States from Thailand, the
largest import source, increased 17% to total 25.2 Moz
(784 t). Thailand’s share of total imports rose from 41%
in 2014 to 44% last year, the highest on record. Declining
US OFFICIAL SILVER JEWELRY IMPORTS silver prices since the middle of 2011 have raised the focus
among global competitors on manufacturing costs. In
60 50 contrast, as silver prices were rising from 2005 through
Others Mexico Thai Market
India Italy Share early 2011, silver’s presence in the luxury and branded JEWELRY & SILVERWARE
50 45
jewelry segments increased. Rising gold prices in the
40 40
period pushed gold jewelry out of a large segment of
Million Ounces

price brackets, diverting consumers toward silver jewelry.

30 35 Lower gold prices more recently have made gold jewelry
%

Thailand more affordable once again and consumers have since

20 30
lost interest in silver within the branded and luxury
10 China 25 segments. Silver as a result has reverted to its core jewelry
category, that of costume and daily pieces. As such, price
0 20
2006 2008 2010 2012 2014
is a dominant driver of demand. This feature has been
Source: GFMS, Thomson Reuters
well evidenced by Thailand’s growth in share of imports.

69
 WORLD SILVER SURVEY 2016

THE CHANGING FACE OF SILVER JEWELRY Jewelry styles and designs offered across the broader retail and
fashion industries have shifted in the last twelve months due
Lower sticker prices aided silver jewelry offtake in several price largely to changing consumer tastes and price point availability.
sensitive markets last year as the 18% drop in the silver price Growth in 2014 was dominated by the plain sector with branded
enabled retailers to offer greater options at critical price points. items such as wrist cuffs, pendants, and large rings. Last year,
Global silver consumption rose just 1% last year, despite the silver was more understated, with simple elegant designs, aimed
lower price environment, as the industry as a whole faced a at the daily wear market, gaining the most traction. Another
myriad of challenges that curbed further growth. In industrialized exciting development has been the introduction of companies
markets, which are dominated by North America and Europe, trying to merge fashion and technology; whereby bracelets or
demand for silver lost favor among some consumers last year, pendants have chips inserted that track activity, buzz when you
mainly due to gold’s increased affordability and growth within receive a call or text, and, interestingly, sends out an alert with
the yellow colored segment. Additionally, there has also been a your location if you feel unsafe.
notable swing away from heavy branded silver jewelry, a feature
of the fashion industry in recent years, especially at the high-
end of the market, to smaller more intricate designs, gemset
pieces and daily wearables. While these designs offer retailers
impressive margins, these changing consumer trends saw silver
offtake, in volume terms, subside in some segments.

Indeed, according to a survey commissioned by the Silver

Institute’s Silver Promotion Service, five times as many retailers
rated silver as giving the best maintained margin than gold
in 2015. This, not surprisingly, has encouraged retailers to
expand their silver jewelry offerings. Survey results from this
report reinforced several of our own findings. According to their
findings, 57% of retailers in the United States increased their
silver inventory in 2015, by an industry average of 21%. The
female self-purchasing market remained the most significant
sales opportunity for nearly 50% or survey respondents, with
Clockwise from top: Bracelet in sterling silver by Kelim Jewelry Design, Woven diamond
buyers from the 20-40 age bracket the dominant target for sales ring in sterling silver by Ariva Fine Jewelry, Earrings in sterling silver by Frederic Duclos,
Cubic cuff in sterling silver by Paz Collective
opportunities.

Further, Italy’s share of United States imports continued AFRICA

to dwindle, standing at 7% in 2015, down from 8% the
previous year and down from a recent peak of 10% in 2010. Egyptian jewelry fabrication was unable to hold on to the
Italy is a major source of higher-end silver jewelry for the modest gain from the previous year, slipping 7% to
United States. 0.8 Moz (25 t) in 2015. The 10% drop in the domestic silver
price was not sufficient to stimulate demand in a market
JEWELRY & SILVERWARE

The United States dollar’s value increased 17% against that struggled with the weight of worsening political and
a basket of currencies last year. This increased buying economic uncertainty. A flare up in violent protests and the
power encouraged wholesalers and retailers to purchase downing of a Russian airliner last year led to a marked drop
more silver jewelry from cheaper foreign sources, which in tourists which also impacted on local consumption.
negatively affected growth in purchases from domestic
manufacturers. While jewelry consumption growth fell ASIA
from 8.6% in 2014 to 8.3% in 2015, domestic fabrication
growth slowed more rapidly from 11% in 2014 to 6.5% in China’s silver jewelry fabrication registered another
2015. Fabrication totaled 13.7 Moz (425 t) last year. steep decline in 2015, falling by 28% year-on-year, after
already sliding by 26% in 2014. A deteriorating domestic

70
 WORLD SILVER SURVEY 2016

economy and a lack of confidence in the silver price outlook for the silver price to rebound (as many are sitting on large
contributed to the weakness. The GFMS team at Thomson inventories) than a rapid recovery in consumer spending.
Reuters estimates that Chinese silver jewelry fabrication
retreated to 33.9 Moz (1,053 t) last year, a drop of 29.0 Moz Indian jewelry fabrication increased by 16% to 72.4 Moz
(902 t) from the 2013 record levels. (2,254 t) in 2015 to the highest level on record and marked
the fourth consecutive annual rise in demand. A rise in
Despite the Chinese economy growing at a reported 6.9% end consumption and demand for cash purchases as
in 2015, the true impact on the ground failed to reflect this against exchange of old jewelry due to lower prices, helped
robust performance. The major meltdown in the domestic drive volumes. While changing fashion trends made an
equities market and a lack of faith in the economic outlook important contribution, the low price point coupled with
resulted in reluctant spending sentiment. As a result, higher price expectations led to rampant stock building
gold, silver and platinum jewelry all recorded double digit across the supply chain.
percentage annual declines.
Fabrication demand for the most consumed products
As we outlined in last year’s report there was already an like anklets, leg chains and toe rings, primarily produced
overcapacity of silver jewelry fabrication in the Chinese from Salem, Kolhapur, Ahmedabad and Rajkot, posted an
market. This glut, coupled with weak consumer demand average year-on-year increase of close to 18%. Our contacts
and banks withdrawing their support on credit lines, also indicated that purity levels had also risen, from an
resulted in significant failures and bankruptcies of average of 50% during the last decade to 70% in the last
fabricators across the country last year. Fabrication fees two years. Indeed, the purity level is likely to rise further in
also dropped below 1 yuan/g (15 cents), the lowest level coming years due to design preferences among consumers.
we can recall, although it has stabilized somewhat since
the fourth quarter. Within the sector, silver bracelets, The growth of fashion and plated jewelry over the last
which usually contain more silver and are the mainstay of seven years has supported growth in silver jewelry as lower
consumption (on average 20-30 grams of silver per item) prices are leading to a switch for products with higher
are usually be given to new born babies, were hardest hit. intrinsic value. Also key to note is that fashion products in
silver jewelry are not entirely new for Indian consumers,
During the market downturn, fabricators are looking for who in recent years readily accepted the cubic zircona
ways to survive. One market trend to emerge in China in studded sterling silver jewelry, which attracts a markup of
recent years has been the notable increase in the purity of close to 50%,being carried to India from Hong Kong. These
the silver being offered. Prior to 2014, 925 sterling silver growing volumes have provided an opportunity for a rise
pieces were dominant within the sector. However, starting in domestic fabrication, as previously thin volumes made it
in 2014, a greater number of fabricators have shifted their difficult to compete with imported jewelry. That said, Indian
focus to produce 990 purity. Starting last year, 999 silver manufacturers may face competition from South Korea due
items have been gaining in popularity and quickly to the Comprehensive Economic Partnership agreement
gaining market share. Towards the end of last year, some through which jewelry can be imported at 2% customs
fabricators started producing 9999 silver jewelry pieces to duty. Higher mark-ups on South Korean items is likely to be
service this demand. a deterrent though. JEWELRY & SILVERWARE

Looking at this year, industry participants are not overly Demand for sterling jewelry is estimated to be growing
optimistic on the outlook of the local silver jewelry market, at a rate of more than 50% year-on-year, with volumes
although they believe that fabrication fees may have now concentrated among a handful of fabricators and primarily
stabilized and may begin to rebound in 2017 due to further from the city of Agra. The growth of e-commerce has
industry consolidation. Their major concern is, unlike helped broaden its reach in the last two years to a wider
2008, when the Chinese economy was hit hard but the market. It is popular amongst working women and
recovery process was initiated quickly, this time many feel students, to an extent that due to higher gold prices and
the downturn of the economic cycle will be a prolonged facing a risk of theft, there has been a gradual shift to
one, and indeed many believe it is more realistic to hope silver earrings among school going students. Also driving

71
 WORLD SILVER SURVEY 2016

attention is the increased demand for filigree jewelry by the rapid expansion of Danish company Pandora,
manufactured primarily in Karimanagar and Cuttack while which fabricates primarily in Thailand and is a significant
antique jewelry is estimated to have grown at 10% last consumer of silver. They sit easily as the largest fabricator
year. Looking ahead, one of the major challenges facing in the country with a significant gap to second position.
the industry will be the implementation of mandatory Last year it was the expansion of fabrication capacity of
hallmarking of all silver jewelry, which is expected to be in this branded product that helped lift Thailand’s fabrication
place by later this year. volumes and boosted exports. Moreover the company
recently announced plans to double its production capacity
We estimate silver consumed for jewelry export at in Thailand over the next three years.
7.8 Moz (243 t), a rise of 10% from 2014. In value terms
it is estimated to have increased by 35% year-on-year, Most of the larger fabricators in Thailand enjoyed a
primarily driven from exports of precious stones, diamonds rebound in demand last year, particularly for those involved
and gem-set segment, which enjoyed a rise of 51% last in producing branded jewelry under contract for European
year. The growth story of this segment has run parallel or United States fashion brands. The weaker domestic
with increased imports of silver over the last three years. currency (the baht slumped to a six-year low) assisted
However, investigation has revealed these exports were fabricators profitably as labor charges are transacted in
primarily a result of overvalued shipments as they included U.S. dollar or euros, but a trend to smaller understated
the usage of synthetic diamonds, while the silver content branded fashion jewelry (as opposed to the large cuffs,
was at an average of just 4% of the total value. rings, and pendants popular in 2014) last year impacted
fabrication volumes.
Thailand’s silver jewelry fabrication increased by a healthy
16% last year to an estimated 21.8 Moz (677 t), a four year Silver jewelry exports enjoyed a solid rise in 2015,
high following a 9% fall in 2014. At first glance this healthy increasing 13% on a gross weight basis. The United States
increase would suggest that the Thai fabrication market as remains the largest market for Thai fabricators, taking
a whole enjoyed a solid year in 2015. However, in reality this more than a third of the total volume. Shipments to this key
was not case with the vast bulk of the increase attributed market increased 17% last year while deliveries to Germany,
to only a handful of larger fabricators with many smaller Australia, and Hong Kong all registered double-digit gains.
and medium sizes businesses focused on exports finding The only major market to contract last year was Russia with
it difficult to compete with China for basic items and the exports to this market down sharply.
Koreans at the higher end of the market. Indeed, several
of the smaller family run operations saw offtake decline Domestically the retail market for silver jewelry has been
last year, despite the 18% drop in the dollar silver price. expanding in recent years as younger generations are
In the last few years the Thai market has been supported attracted by the lower prices and fashion designs. Demand

INDIAN JEWELRY AND SILVERWARE FABRICATION THAI JEWELRY AND SILVERWARE FABRICATION

70 90 40 1,700
Silverware Jewelry Real Silver Price
Jewelry Silverware
JEWELRY & SILVERWARE

Constant 2015 Rupee/kg (thousands)

60 75 1,450
Real Silver Price
30
50
Constant 2015 Baht/oz

60 1,200
Million Ounces

Million Ounces

40
45 20 950
30
30 700
20
10

10 15 450

0 0 0 200
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

72
 WORLD SILVER SURVEY 2016

TABLE 9 - SILVER FABRICATION: JEWELRY (INCLUDING THE USE OF SCRAP)

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Italy 28.2 25.8 22.6 21.3 21.8 16.5 15.1 15.9 17.8 18.4
Turkey 4.8 4.1 4.5 3.9 3.4 3.1 3.4 4.0 4.8 4.4
Germany 3.8 3.9 3.9 3.7 3.8 3.7 3.6 3.4 3.3 3.3
Russia 1.6 2.3 2.5 3.0 3.3 2.7 2.6 2.6 2.8 2.9
France 1.6 1.7 1.6 1.7 1.9 2.2 2.0 1.7 1.6 1.6
Spain 1.3 1.1 1.1 1.2 1.1 1.1 1.0 0.9 0.9 0.9
Poland 1.7 1.9 1.9 1.5 1.3 0.8 0.6 0.6 0.6 0.5
Greece 1.1 1.0 1.2 1.0 0.9 0.7 0.6 0.5 0.5 0.5
Sweden 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
UK 1.0 0.5 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3
Portugal 0.9 0.7 0.6 0.6 0.6 0.4 0.2 0.2 0.3 0.3
Denmark 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Switzerland 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Netherlands 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Norway 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other Countries 0.8 0.8 0.8 0.6 0.6 0.6 0.6 0.5 0.6 0.5
Total Europe 48.0 44.9 42.3 40.1 40.3 33.2 31.1 31.8 34.7 34.8
North America
Mexico 12.0 12.2 11.8 10.5 10.4 13.9 13.3 15.2 16.3 16.7
United States 13.5 12.9 12.0 10.7 12.0 11.1 10.3 11.6 12.8 13.7
Canada 1.0 0.9 0.8 0.8 0.8 0.8 0.8 0.7 0.6 0.7
Total North America 26.4 26.0 24.6 22.0 23.2 25.8 24.3 27.5 29.7 31.1
Central & South America
Brazil 1.5 1.5 1.5 1.7 1.9 1.5 1.5 3.0 2.8 2.2
Peru 0.4 0.3 0.4 0.5 0.5 0.5 0.5 0.5 0.6 0.6
Colombia 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.4 0.3
Argentina 0.3 0.3 0.3 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Other Countries 1.4 1.4 2.0 2.7 2.6 1.9 2.0 2.6 2.7 2.6
Total C. & S. America 3.8 3.8 4.4 5.3 5.6 4.4 4.5 6.8 6.8 6.0
Asia
India 11.9 19.4 19.3 20.8 22.7 21.8 23.3 42.3 62.2 72.5
China 30.3 34.3 36.1 40.0 46.4 54.4 56.6 62.9 46.7 33.9
Thailand 32.5 32.0 29.1 26.7 28.0 23.7 19.5 20.6 18.7 21.8
Indonesia 4.4 4.2 4.2 4.2 4.7 5.5 6.2 6.5 6.2 6.5
South Korea 4.0 4.2 4.1 4.2 4.7 5.2 5.4 5.5 5.0 5.6
Japan 1.9 2.1 2.0 2.1 2.2 2.2 2.3 2.4 2.2 2.2
Vietnam 1.0 1.1 1.2 1.2 1.4 1.4 1.4 1.4 1.5 1.6
Bangladesh 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.5 0.6 1.1 JEWELRY & SILVERWARE
Nepal 1.0 1.1 1.1 1.2 1.1 1.1 1.2 0.7 0.7 0.8
Saudi Arabia 0.6 0.6 0.6 0.6 0.7 0.8 0.8 0.8 0.8 0.8
Cambodia 0.6 0.6 0.6 0.6 0.7 0.7 0.8 0.8 0.7 0.8
UAE 0.5 0.5 0.5 0.5 0.6 0.7 0.7 0.8 0.7 0.7
Malaysia 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.8 0.8 0.7
Pakistan 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.5
Sri Lanka 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4
Israel 0.4 0.5 0.5 0.4 0.4 0.3 0.3 0.4 0.4 0.4
Taiwan 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Iran 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3

© GFMS, Thomson Reuters / The Silver Institute

73
 WORLD SILVER SURVEY 2016

TABLE 9 - SILVER FABRICATION: JEWELRY (INCLUDING THE USE OF SCRAP)

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Philippines 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Hong Kong 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2
Bahrain 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2
Syria 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1
Myanmar & Laos 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Countries 0.8 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8
Total Asia 93.5 104.7 103.4 106.8 118.1 122.4 123.1 149.2 150.1 152.1
Africa
Egypt 1.3 1.4 1.3 1.2 1.1 0.5 0.7 0.8 0.9 0.8
Morocco 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.3 0.3 0.3
Tunisia 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Other Countries 0.4 0.4 0.5 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Total Africa 2.2 2.3 2.3 2.0 2.0 1.4 1.6 1.7 1.8 1.7
Oceania
Total Oceania 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.9
World Total 174.5 182.3 177.6 176.9 190.0 187.9 185.4 217.8 224.0 226.5
© GFMS, Thomson Reuters / The Silver Institute

was hamstrung for large parts of the year,however, by poor silver purities, to push the market higher last year. The
consumer sentiment as an uncertain political environment deteriorating domestic economy, however, may hinder the
and poor economic performance (Thailand’s economy grew growth of this industry in 2016.
at just 2.8% last year) limited discretionary spending.
Jewelry fabrication in Indonesia returned to growth in
As was the case in 2014 the hardest hit sector last 2015, after a brief hiatus in the growth trend in 2014, to
year was the low end of the market. Those fabricators reach a new record level of 6.5 Moz (203 t). The healthy
producing small plain designs (less than three grams) have 6% gain was primarily a function of a rise in domestic
seen export orders decline over a number of years, not consumption which has continued to expand, especially
necessarily due to a drop in end-user demand but rather in urban centers where silver is winning market share at
competition from rival countries. Traditionally this segment the expense of white gold. Silver has historically not been
has been the mainstay of Thailand’s fabrication industry, favored by Indonesians as a store of wealth, but younger
but the dominance in this area has been eroded as China generations are moving away from this view and are
and other emerging markets have invested in technology instead more interested in the fashion alternatives and the
JEWELRY & SILVERWARE

and shifted focus to exports . competitive price of silver. Indonesia’s economy grew at the
slowest pace in six years, rising only 4.8% for the period.
Jewelry fabrication in South Korea registered 13% growth This slowdown had a greater impact on gold jewelry as
to a total of 5.6 Moz (174 t) in 2015. While the domestic consumers tightened purse strings while the lower entry
economy remained fragile, the major consumers of this point of silver benefitted fabrication volumes. Jewelry
segment are mostly teenagers and younger generations exports were also marginally stronger last year although it
in their early 20s, who are still often living with their was far from uniform with impressive growth to Singapore
families and rely on financial assistance from their parents. offset by a slowdown in deliveries to Hong Kong and the
Fabricators also introduced more fashionable designs United States.
and lower price tags per piece in conjunction with lower

74
 WORLD SILVER SURVEY 2016

SILVERWARE has been constrained by fewer hotels reserving some of

their budget towards the purchase of silverware. Domestic
• Global silverware fabrication increased for the third year in demand has been weak, also reflected in imports which
succession to an estimated 62.9 Moz (1,957 t) with lower more than halved compared to 2014. Exports of silverware
prices and a healthy uptick in demand from India the on the other hand recorded a significant rise of 44%,
catalyst for the rise. as fabricators look towards foreign markets, such as
Switzerland and Canada. Turkish silverware fabrication
Global silverware fabrication enjoyed the third annual rise recorded a rise of 7% last year reaching, 1.5 Moz (46 t).
in succession to an estimated 62.9 Moz (1,957 t), a ten-year Despite the domestic challenges that remain present in
high. As was the case in 2014 much of the increase last the country, we understand that Turkish fabricators have
year can be attributed to a 15% jump in demand from the become more competitive abroad.
Indian Sub-Continent to an all time high, which contributed
almost two thirds of the global total. Elsewhere, the NORTH AMERICA
significant contraction in the silver price and an improved
economic environment in western markets saw modest Unites States silverware fabrication was mostly flat in
gains in several regions last year, while the ongoing anti- 2015, totaling 0.7 Moz (21 t). Last year’s 0.1% increase
corruption crackdown accounted for the marked decline in comes after a 2.5% increase in 2014. The stronger U.S.
China. dollar weighed on export demand and tourist purchases.
All else equal, consumers continue to exhibit less and
EUROPE less interest in silverware; it has however retained some
demand volume among a niche segment for gifting and
European silverware fabrication continued to decline special occasion purposes among the wealthier population.
in 2015, to 10.0 Moz (310 t), representing a drop of 4%
year-on-year. To put this in perspective, the long-running ASIA
decline had seen silverware offtake drop to only 46% of
the total a decade ago. Much of the decline was due to a Indian silverware fabrication gained by 15% last year to
structural shift in societal habits such as the fall in gifting of 41.3 Moz (1,285 t), thereby rising to the highest level on
silverware for family and religious holidays, which itself was record. This marked the third consecutive year of increase
a function of weak economic conditions, high silver prices, as fabricators increased their inventory level to take
and increasing competition from other consumer goods. advantage of lower price levels. Domestic consumption,
however, registered annual growth of “only” 17%, down
Russian silverware fabrication continued to decline in 2015, from 35% growth seen in 2014, resulting in increased
falling by 7% to an estimated 4.1 Moz (127 t), the lowest unsold stock.
since 2006. In addition to the continued structural shift
in gifting culture away from traditional and heavyweight WORLD SILVERWARE FABRICATION
silverware towards other consumer goods, the economy
and affordability issues played a paramount role last year. 80 Other
Worsening economic conditions and high silver prices in 70
North America JEWELRY & SILVERWARE
local terms contributed to lower silverware offtake last year. Europe
60 Asia
Million Ounces

50
Silverware fabrication in Italy continued to suffer,
registering an 8% drop in 2015, to 1.8 Moz (54 t). This 40

was mainly due to the continued shift in gifting culture 30

away from expensive silverware towards other consumer 20
goods such as branded accessories and technological
10
gadgets. Weak economic conditions also contributed to
0
lower demand. Meanwhile, German fabrication continued 2006 2008 2010 2012 2014
to drop, falling by 2% to 0.9 Moz (28 t) in 2015. Uptake Source: GFMS, Thomson Reuters

75
 WORLD SILVER SURVEY 2016

TABLE 10 - SILVER FABRICATION: SILVERWARE (INCLUDING THE USE OF SCRAP )

(million ounces) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Russia 3.0 4.3 5.2 5.5 6.0 5.0 4.8 4.6 4.4 4.1
Italy 7.2 6.6 5.5 4.6 4.0 2.8 2.3 2.0 1.9 1.8
Turkey 2.4 2.1 2.2 1.8 1.5 1.3 1.1 1.2 1.4 1.5
Germany 2.9 2.7 2.3 1.6 1.6 1.4 1.1 0.9 0.9 0.9
Norway 0.9 0.6 0.7 0.5 0.5 0.4 0.4 0.4 0.4 0.4
Sweden 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Greece 1.4 1.2 1.0 0.8 0.6 0.5 0.3 0.3 0.3 0.3
Denmark 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2
UK 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2
France 0.2 0.2 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1
Finland 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other Countries 0.8 0.7 0.6 0.4 0.4 0.3 0.3 0.2 0.2 0.2
Total Europe 20.3 19.7 19.0 16.3 15.7 12.8 11.3 10.6 10.3 10.0
North America
United States 1.4 1.4 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.7
Mexico 2.0 1.4 1.2 0.9 0.7 0.5 0.5 0.6 0.6 0.6
Canada 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Total North America 3.6 2.9 2.3 1.9 1.6 1.4 1.3 1.3 1.3 1.3
Central & South America
Colombia 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.1 0.1
Peru 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1
Other Countries 0.7 0.7 0.7 0.6 0.5 0.4 0.4 0.4 0.3 0.2
Total C. & S. America 1.3 1.3 1.2 1.0 0.9 0.8 0.8 0.7 0.6 0.5
Asia
India 16.2 14.9 15.5 16.6 16.9 16.6 15.2 30.0 36.1 41.3
China 8.4 9.1 8.7 6.9 7.6 8.3 8.6 10.0 6.1 3.5
Thailand 4.3 4.5 4.3 3.7 2.5 1.9 1.8 1.6 1.7 1.8
Israel 1.5 1.4 1.3 1.1 1.0 0.7 0.6 0.7 0.8 0.9
Iran 1.4 1.4 1.4 1.2 1.2 1.0 0.9 0.9 0.8 0.8
Bangladesh 0.8 0.7 0.7 0.7 0.6 0.6 0.5 0.4 0.4 0.5
Indonesia 0.7 0.6 0.6 0.7 0.7 0.6 0.5 0.4 0.4 0.4
Pakistan 0.6 0.6 0.6 0.5 0.5 0.4 0.4 0.3 0.3 0.4
South Korea 0.7 0.7 0.7 0.6 0.6 0.6 0.5 0.5 0.4 0.3
Sri Lanka 0.4 0.4 0.4 0.4 0.3 0.3 0.2 0.2 0.3 0.3
Nepal 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Countries 1.2 1.2 1.2 1.1 1.0 0.9 0.8 0.8 0.7 0.7
Total Asia 36.4 35.7 35.5 33.5 32.9 31.9 30.0 45.9 48.1 50.9
Africa
JEWELRY & SILVERWARE

Africa 0.5 0.5 0.5 0.5 0.4 0.3 0.3 0.3 0.3 0.3
Total Africa 0.5 0.5 0.5 0.5 0.4 0.3 0.3 0.3 0.3 0.3
Oceania
Australia 0.04 0.04 0.04 0.03 0.03 0.02 0.02 0.02 0.02 0.02
Total Oceania 0.04 0.04 0.04 0.03 0.03 0.02 0.02 0.02 0.02 0.02
World Total 62.1 60.2 58.4 53.2 51.6 47.2 43.7 58.8 60.7 62.9

© GFMS, Thomson Reuters / The Silver Institute

76
 WORLD SILVER SURVEY 2016

Gifting and personal consumption was a key driver new product was well received, an oversupply was flushed
in the category of kitchen utensils, lamps and candle into the market, and as a result, consumer interest quickly
stands which are normally mass produced and thus drive waned. Domestic silverware fabricators, wholesalers and
economies of scale for fabricators. Meanwhile, the fall in retailers are all now sitting on a high level of inventories
prices led to an increase in the mark-up for fabricators, with this impacting on fresh fabrication volumes. Industry
rising from an average of 18% in 2013 to 25% last year, a consolidation will continue in 2016, and fabricators are
very nominal rise, as on the other hand, the price decreased actively developing new products, hoping to facilitate
by 25% of the same period. This is in addition to the wide market demand. While the outlook remains poor, some
scale under-carating which becomes a large source of industry participants believe that an uptick in silver price
income for those manufacturers involved in the cottage may help demand.
industry model. However, this has not been the case for all,
with some of the professionally managed manufacturers Thailand’s silverware fabrication benefited from the lower
accelerating in this space and winning market share. This silver price in 2015, rising 6% to an estimated
has been possible as consumers are very conscious on 1.8 Moz (55 t). This marks the second consecutive annual
the purity front and are showing a willingness to pay the rise in offtake and follows a six-year period when Thai
additional cost. This awareness is mainly in the upper strata demand slumped by more than 4.5 Moz (91 t) as higher
of society and is slowly trickling down to the middle class. silver prices, societal trends, and an economic slowdown
Demand for silver articles like statues and decorative pieces in western markets drove demand sharply lower. Despite
for the home continued to see a phenomenal growth due to the modest recovery in 2015 this segment as a whole has
rising income levels. seen considerable consolidation in recent years as many
small family run operations have been forced out of the
After recording a 39% decline in 2014, Chinese silverware industry. Indeed, Thai fabrication demand last year was
fabrication fell another 43% to an estimated 3.5 Moz more than 60% below the level of 2007. Domestic demand
(109 t) in 2015. This particular sector has been hit hard was broadly flat last year. While lower silver prices helped,
since the middle of 2013 when the government tightened demand was hamstrung for large parts of the year by poor
up its anti-corruption policy, which has heavily discouraged consumer sentiment as an uncertain and often volatile
gifting activities in the country. Decorative statues, which political environment limited discretionary spending and
generally consume more silver, were the dominant segment impacted tourism. One of the key drivers for the rise last
in the Chinese market during 2012-2013. This segment was year was the rebound in export demand, which according
negatively affected, however, by the suppression of the to available trade data rose almost 14% last year, aided by
gifting culture, and hence silverware fabricators switched stronger demand from Europe.
their focus to silver teapots and cups, which in general
require 500-600 grams of silver per set. While initially this Silverware production in Israel enjoyed a modest rise in
2015, the third consecutive increase, as the lower price
MAIN GLOBAL SILVERWARE FABRICATORS ensured the trend towards heavier items and away from
plated was maintained. Exports to the largest market for
250 China Judaic items, the United States, were moderately stronger
India with an improved economy central to the rise. On the JEWELRY & SILVERWARE
200 Thailand domestic front, demand for menorahs, candle-sticks, and
Italy
other religious articles was broadly steady with the lower
Indexed (2006=100)

150 silver price having only limited impact at the retail level.
Total fabrication is estimated to have increased 12% to
100 0.9 Moz (27 t), its highest level since 2010.

50

0
2006 2008 2010 2012 2014

Source: GFMS, Thomson Reuters

77
 WORLD SILVER SURVEY 2016

9. APPENDICES
APPENDICES

Page
Appendix 1 World Silver Supply and Demand (tons) 79
World Silver Mine Production (tons) 80
Silver Fabrication: Coins and Medals (tons) 82
Supply of Silver from the Recycling of Scrap (tons) 82
World Silver Fabrication Including the Use of Scrap (tons) 84
Silver Fabrication: Industrial Applications (tons) 86
Silver Fabrication: Electrical and Electronics (tons) 88
Silver Fabrication: Brazing Alloys and Solders (tons) 88
Silver Fabrication: Photographic Use (tons) 89
Silver Fabrication: Ethylene Oxide Catalyst Use (tons) 89
Silver Fabrication: Jewelry and Silverware (tons) 90
Silver Fabrication: Jewelry (tons) 92
Silver Fabrication: Silverware (tons) 94
Top 20 Silver Producing Countries and Companies (tons) 95
Appendix 2 Nominal Silver Prices, 1981 - 2015 96
Appendix 3 Real Silver Prices, 1981 - 2015 97
Appendix 4 Silver Prices, in US$ per ounce (London and COMEX) 98
US Prices in 2015 (monthly) 98
Indicative Lease Rates, 2015 98
Appendix 5 Leading Primary Silver Mines 99
Silver Mine Production by Source Metal 99
Silver Mine Production by Main Region and Source Metal 99
Appendix 6 COMEX and London Bullion Market Turnover 100
Quarterly ETP Holdings and Value 100

78
 WORLD SILVER SURVEY 2016

APPENDIX 1
WORLD SILVER SUPPLY AND DEMAND

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

APPENDICES
Supply
Mine Production 20,011 20,769 21,297 22,312 23,422 23,563 24,596 25,621 27,006 27,579
Net Government Sales 2,441 1,322 949 486 1,375 374 229 245 - -
Old Silver Scrap 6,441 6,351 6,283 6,257 7,077 8,133 7,948 5,974 5,235 4,545
Net Hedging Supply -362 -750 -269 -541 1,569 381 -1,464 -1,081 521 244
Total Supply 28,532 27,692 28,259 28,513 33,442 32,451 31,309 30,759 32,762 32,367
Demand
Jewelry 5,429 5,670 5,524 5,502 5,909 5,846 5,767 6,774 6,967 7,045
Coins & Bars 1,578 1,743 5,982 2,849 4,492 6,545 4,991 7,531 7,343 9,092
Silverware 1,933 1,873 1,818 1,654 1,606 1,467 1,359 1,830 1,887 1,957
Industrial Fabrication 20,183 20,560 20,427 16,875 20,228 21,035 19,129 19,257 19,011 18,311
…of which Electrical & Electronics 7,537 8,165 8,451 7,072 9,367 9,044 8,295 8,274 8,192 7,672
…of which Brazing Alloys & Solders 1,701 1,814 1,916 1,666 1,895 1,951 1,884 1,965 2,057 1,902
…of which Photography 4,423 3,638 3,054 2,377 2,098 1,905 1,687 1,569 1,508 1,452
…of which Photovoltaic* - - - - - 2,359 1,957 1,944 1,966 2,415
…of which Ethylene Oxide 207 245 231 148 272 194 148 239 154 317
…of which Other Industrial 6,316 6,698 6,777 5,612 6,596 5,581 5,157 5,266 5,134 4,553
Physical Demand 29,123 29,846 33,751 26,880 32,235 34,893 31,246 35,392 35,208 36,405
Physical Surplus/ Deficit -590 -2,154 -5,492 1,633 1,207 -2,442 63 -4,633 -2,445 -4,038
ETP Inventory Build 3,944 1,704 3,152 4,880 4,027 -747 1,720 77 46 -549
Exchange Inventory Build -279 669 -222 -475 -231 378 1,934 273 -273 10
Net Balance -4,256 -4,526 -8,421 -2,773 -2,589 -2,074 -3,591 -4,983 -2,218 -3,498
Silver Price (London US$/oz) 11.55 13.38 14.99 14.67 20.19 35.12 31.15 23.79 19.08 15.68
*Photovoltaic demand included in “Other Industrial” prior to 2011
© GFMS, Thomson Reuters / The Silver Institute

WORLD SILVER SUPPLY WORLD SILVER DEMAND

Net Hedging Supply Mine Production Producer De-Hedging Jewelry

Scrap Real Silver Price Silverware Industrial Applications
Net Government Sales Coins Real Silver Price

40 60 40 60

50 50
30 30
Constant 2015 US$/oz

Constant 2015 US$/oz

40 40
Tons (thousands)

Tons (thousands)

20 30 20 30

20 20
10 10
10 10

0 0 0 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

79
 WORLD SILVER SURVEY 2016

WORLD SILVER MINE PRODUCTION

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Russia 972 910 1,132 1,312 1,145 1,198 1,384 1,428 1,434 1,572
Poland 1,260 1,233 1,212 1,220 1,171 1,270 1,284 1,170 1,264 1,291
APPENDICES

Sweden 266 294 263 270 285 283 306 337 396 494
Turkey 187 235 314 389 384 288 228 188 205 202
Portugal 20 28 41 22 23 31 34 45 54 74
Spain 2 2 2 5 23 33 37 41 40 40
Greece 25 35 35 29 27 25 30 29 27 32
Bulgaria 18 14 11 15 13 17 19 19 18 19
Macedonia 11 8 9 9 9 9 10 11 10 11
Ireland 5 5 9 5 4 6 10 8 6 6
Romania 15 3 0 3 7 12 9 9 3 3
Finland 0 0 0 0 0 0 0 3 2 3
Other Countries 3 2 1 1 2 2 1 1 1 1
Total Europe 2,786 2,769 3,030 3,281 3,092 3,174 3,351 3,287 3,462 3,746
North America
Mexico 2,970 3,135 3,236 3,554 4,411 4,778 5,358 5,513 5,795 5,895
United States 1,140 1,260 1,120 1,250 1,280 1,120 1,060 1,040 1,180 1,100
Canada 969 829 669 609 573 582 685 640 493 380
Total North America 5,079 5,225 5,026 5,412 6,264 6,480 7,104 7,193 7,468 7,374
Central & South America
Peru 3,471 3,539 3,739 3,971 3,691 3,473 3,547 3,754 3,821 4,227
Chile 1,607 1,936 1,405 1,301 1,287 1,291 1,195 1,174 1,574 1,505
Bolivia 472 525 1,114 1,326 1,259 1,214 1,206 1,281 1,345 1,306
Argentina 214 255 337 560 726 708 762 774 906 1,080
Guatemala 50 88 100 129 195 273 205 281 858 863
Dominican Republic 0 0 0 18 19 19 27 87 141 127
Honduras 56 54 59 58 58 49 51 51 57 35
Nicaragua 3 3 3 4 7 8 10 14 17 18
Ecuador 13 13 13 13 15 16 17 16 18 18
Brazil 10 11 11 12 12 12 12 15 15 17
Colombia 8 10 9 11 15 24 19 14 12 16
Venezuela 2 1 1 1 1 1 1 1 1 2
Other Countries 5 5 4 4 4 3 6 5 3 3
Total C. & S. America 5,909 6,441 6,797 7,408 7,290 7,091 7,057 7,468 8,768 9,215
Asia
China 2,361 2,466 2,613 2,698 2,942 3,192 3,401 3,529 3,499 3,392
Kazakhstan 796 708 629 614 548 547 545 611 590 538
India 183 178 212 193 255 234 280 333 261 374
Indonesia 246 268 248 240 209 190 165 255 240 304
Armenia 40 52 43 41 51 74 90 105 115 117
Islamic Rep. of Iran 100 90 98 107 112 112 110 99 98 102
Mongolia 37 37 36 35 34 33 33 49 64 82
Uzbekistan 64 79 53 52 59 59 59 60 54 47
Dem. Rep. of Laos 6 4 7 15 17 18 20 32 40 41
Philippines 24 28 14 35 42 43 48 47 27 29
North Korea 29 29 29 25 26 27 27 28 28 26
© GFMS, Thomson Reuters / The Silver Institute

80
 WORLD SILVER SURVEY 2016

WORLD SILVER MINE PRODUCTION

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Thailand 17 13 13 21 23 24 38 36 34 24
Saudi Arabia 9 9 12 12 12 9 11 19 22 23
Japan 34 14 12 12 11 17 17 15 15 16

APPENDICES
Kyrgyzstan 6 6 10 9 10 10 6 11 10 12
Tajikistan 1 1 1 1 1 2 2 3 3 4
Pakistan 2 2 2 2 3 3 3 3 3 3
Other Countries 2 2 2 2 6 6 6 2 2 3
Total Asia 3,956 3,986 4,034 4,112 4,360 4,601 4,858 5,239 5,105 5,136
Africa
Morocco 241 224 251 270 326 257 258 282 274 296
Eritrea 0 0 0 0 0 4 23 25 47 70
South Africa 87 70 75 78 79 73 67 69 37 35
Zambia 10 11 12 14 15 15 15 16 15 15
Burkina Faso 0 0 0 0 0 0 1 1 13 12
Tanzania 12 11 9 11 12 13 13 12 12 12
Botswana 4 4 5 5 5 5 7 10 10 5
Zimbabwe 3 2 2 2 3 3 4 4 4 4
Ethiopia 1 1 1 2 2 3 3 3 3 3
Mali 3 3 2 3 2 2 3 3 2 3
Ghana 2 2 2 2 2 2 2 3 3 2
Dem. Rep. of the Congo 68 70 34 1 7 11 14 62 8 2
Other Countries 35 8 8 1 1 2 2 2 2 2
Total Africa 465 406 403 386 455 392 412 491 431 461
Oceania & Other
Australia 1,728 1,879 1,926 1,631 1,880 1,725 1,727 1,840 1,675 1,566
Papua New Guinea 51 44 50 67 67 92 82 91 87 71
New Zealand 35 19 32 14 13 8 6 11 10 9
Total Oceania 1,816 1,942 2,009 1,712 1,960 1,826 1,814 1,942 1,772 1,647
World Total 20,011 20,769 21,297 22,312 23,422 23,563 24,596 25,621 27,006 27,579
© GFMS, Thomson Reuters / The Silver Institute

WORLD SILVER MINE PRODUCTION SILVER PRODUCER HEDGING: OUTSTANDING POSITIONS

35 4 Options Delta
Oceania South America
Africa North America Forward Positions
30
Asia Europe
Tons (thousands, end-year)

3
25
Tons (thousands)

20
2
15

10
1

0 0
2006 2008 2010 2012 2014 2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

81
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: COINS AND MEDALS INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
United States 548 497 790 1,067 1,296 1,276 1,084 1,374 1,417 1,513
Canada 89 133 281 336 579 729 561 925 953 1,112
Australia 43 110 182 201 272 350 201 283 245 384
APPENDICES

China 50 81 88 94 46 128 141 193 185 331

India 0 0 0 0 0 58 58 169 195 278
Austria 17 17 259 296 360 571 285 458 149 233
United Kingdom 13 14 16 17 16 31 22 68 60 98
Germany 272 195 223 232 200 102 35 20 20 63
Mexico 58 51 43 52 64 52 23 34 31 30
Japan 2 2 9 12 19 19 23 25 22 22
Other Countries 144 128 103 105 130 117 213 86 83 110
World Total 1,235 1,228 1,994 2,413 2,983 3,433 2,647 3,635 3,360 4,172
© GFMS, Thomson Reuters / The Silver Institute

SUPPLY OF SILVER FROM THE RECYCLING OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Germany 470 471 455 391 465 519 672 537 446 464
Russian Federation 262 274 258 261 356 346 340 311 320 311
Italy 170 175 183 181 203 303 309 270 245 212
United Kingdom 340 348 340 316 198 350 305 223 173 182
France 139 142 158 170 193 217 182 161 153 151
Turkey 35 30 36 33 32 36 32 32 46 53
Austria 40 38 36 33 35 38 37 36 34 35
Czech Republic 23 27 27 28 37 48 51 45 42 33
Poland 21 23 22 23 28 35 36 31 29 31
Netherlands 40 35 34 32 35 38 39 27 25 27
Spain 13 12 14 16 23 40 41 35 32 25
Sweden 29 28 27 26 26 28 28 22 20 21
Belgium 20 20 19 18 20 21 22 15 15 14
Portugal 13 13 12 12 12 14 14 11 10 13
Denmark 16 16 15 14 16 17 16 13 12 12
Slovakia 5 6 5 6 7 10 11 9 8 10
Hungary 5 6 6 6 8 11 11 10 9 9
Finland 11 11 10 10 10 11 11 9 8 8
Norway 9 8 9 9 10 10 10 8 7 8
Other Countries 27 29 28 27 28 29 29 24 22 22
Total Europe 1,689 1,711 1,694 1,612 1,742 2,122 2,197 1,831 1,656 1,640
North America
Mexico 1,656 1,666 1,724 1,692 2,015 2,375 2,143 1,457 1,252 1,099
United States 44 50 52 48 51 56 51 34 30 27
Canada 72 84 95 98 123 140 145 35 14 14
Total North America 1,772 1,800 1,871 1,838 2,189 2,571 2,339 1,526 1,296 1,139
Central & South America
Brazil 32 32 32 34 46 78 79 62 59 72
Venezuela 8 8 8 8 10 11 10 12 11 13
© GFMS, Thomson Reuters / The Silver Institute

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SUPPLY OF SILVER FROM THE RECYCLING OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Uruguay 6 6 6 5 8 13 12 11 11 12
Other Countries 59 52 48 44 58 68 66 45 30 32
Total C.&S. America 105 98 94 91 122 170 167 131 111 128

APPENDICES
Asia
Japan 810 800 736 662 649 714 662 623 609 542
China 636 700 705 787 909 992 962 935 830 501
S Korea 240 242 240 262 294 310 281 262 215 126
Taiwan 88 91 97 111 129 140 133 113 97 85
India 705 502 429 465 558 642 771 169 92 79
Thailand 80 85 91 96 115 116 99 87 69 62
Saudi Arabia 56 58 59 60 69 73 68 64 58 52
Israel 12 13 13 13 16 17 16 13 14 13
Singapore 16 16 15 15 17 18 17 16 14 12
Kazakhstan 7 7 7 7 9 9 9 8 8 10
Indonesia 12 12 12 12 13 15 14 13 11 9
Uzbekistan 7 7 7 7 9 9 9 8 8 9
Vietnam 11 12 12 11 12 12 11 10 9 8
Other Countries 50 50 50 53 61 69 66 53 36 29
Total Asia 2,729 2,594 2,474 2,561 2,861 3,137 3,120 2,374 2,069 1,538
Africa
Morocco 29 28 29 31 32 35 35 31 29 30
Egypt 46 48 51 55 62 27 23 21 20 18
Other Countries 18 18 18 18 20 22 22 19 18 19
Total Africa 93 94 99 105 114 84 80 71 66 67
Oceania
Australia 53 52 51 49 49 49 45 41 37 33
Total Oceania 53 52 51 49 49 49 45 41 37 33
World Total 6,441 6,351 6,283 6,257 7,077 8,133 7,948 5,974 5,235 4,545
© GFMS, Thomson Reuters / The Silver Institute

WORLD SILVER SCRAP SUPPLY WORLD SCRAP SUPPLY, 2015

Others
Real Silver Price
10 60 5%
Others
Asia
50
8 North America North America
Constant 2015 US$/oz

Europe 25% Asia

40
Tons (thousands)

34%
6

30

4
20

2
10

0 0 Europe
2006 2008 2010 2012 2014 36%

Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

83
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WORLD SILVER FABRICATION INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Germany 1,331 1,348 1,546 1,503 1,690 1,488 1,204 1,205 1,003 1,066
Italy 1,449 1,359 1,226 1,088 1,109 886 808 820 875 885
APPENDICES

Russian Federation 826 902 930 854 944 864 845 832 793 742
United Kingdom 1,013 779 725 588 677 698 631 641 623 659
France 413 465 597 633 697 633 544 551 415 446
Belgium 931 876 768 613 577 519 487 449 447 440
Austria 38 38 279 315 380 591 304 476 168 251
Turkey 276 247 262 221 201 181 184 209 241 234
Czech Republic 74 84 91 71 84 89 94 99 102 99
Switzerland 94 94 94 86 92 92 89 88 86 85
Spain 156 141 118 112 109 96 83 76 81 80
Netherlands 69 70 66 58 63 61 61 62 56 55
Poland 92 97 99 82 77 58 48 48 49 48
Norway 52 40 40 30 33 34 34 32 30 28
Sweden 37 35 34 29 39 28 28 27 28 27
Greece 77 70 68 56 46 36 28 24 25 24
Hungary 8 8 10 8 8 8 8 4 5 22
Denmark 21 21 20 18 19 18 18 16 17 17
Portugal 39 31 25 25 25 17 12 11 12 13
Other Countries 49 42 42 22 29 31 33 29 28 27
Total Europe 7,045 6,747 7,041 6,411 6,898 6,427 5,541 5,699 5,084 5,249
North America
United States 5,778 5,575 6,137 5,664 6,754 7,130 6,407 6,424 6,972 7,510
Canada 178 250 386 404 667 813 644 1,031 1,061 1,228
Mexico 587 576 545 504 556 689 657 729 763 811
Total North America 6,543 6,401 7,067 6,572 7,977 8,633 7,708 8,183 8,796 9,550
Central & South America
Brazil 145 223 218 219 319 345 349 413 356 328
Dominican Republic 19 20 28 46 42 28 29 42 45 47
Argentina 60 56 43 34 39 39 38 40 39 36
Colombia 21 21 19 17 18 17 17 24 35 32
Peru 22 21 23 25 26 22 22 23 24 23
Other Countries 67 68 85 103 103 80 82 98 99 97
Total C. & S. America 316 389 388 399 504 503 509 598 554 516
Asia
India 2,522 2,878 5,776 1,777 2,822 4,477 3,119 5,756 6,579 7,640
China 4,711 5,402 6,013 5,843 6,792 7,534 7,711 8,448 7,808 6,865
Japan 4,097 3,912 3,272 2,105 3,010 3,220 2,906 2,977 2,843 2,929
Thailand 1,178 1,168 1,074 982 984 835 699 729 671 769
S Korea 842 903 955 763 929 941 928 895 820 685
Taiwan 438 534 533 397 486 510 463 471 488 470
Indonesia 178 170 168 166 199 225 245 254 243 254
Hong Kong 219 233 224 182 210 211 300 192 162 145
Iran 132 132 154 98 102 95 92 91 89 88
Israel 88 87 82 69 67 55 50 57 62 64
Singapore 3 3 3 6 60 63 23 30 35 61

84
 WORLD SILVER SURVEY 2016

WORLD SILVER FABRICATION INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Saudi Arabia 64 64 29 190 192 98 55 60 55 56
Vietnam 35 37 39 40 45 46 46 45 49 51
Bangladesh 45 45 46 45 43 41 40 28 30 50

APPENDICES
Other Countries 333 340 413 369 366 374 342 324 320 312
Total Asia 14,885 15,909 18,782 13,034 16,306 18,725 17,019 20,358 20,253 20,437
Africa
Egypt 52 53 49 44 43 19 27 29 32 29
Morocco 19 20 19 17 18 18 18 18 19 19
Tunisia 10 11 11 10 11 10 10 11 11 11
Mali 9 9 10 9 9 9 9 9 9 9
South Africa 8 8 8 8 8 8 8 8 8 8
Algeria 6 6 6 6 6 5 5 6 6 6
Other Countries 56 57 54 49 47 24 31 34 36 33
Total Africa 108 112 109 98 99 74 81 85 89 85
Oceania
Australia 225 288 362 364 450 531 387 467 430 566
Other Countries 1 1 1 1 2 1 1 1 2 2
Total Oceania 226 289 363 365 452 532 388 468 432 568
World Total 29,123 29,846 33,751 26,880 32,235 34,893 31,246 35,392 35,208 36,405
© GFMS, Thomson Reuters / The Silver Institute

WORLD SILVER FABRICATION WORLD SILVER FABRICATION, 2015

Others
50 60 4%
Silverware Real Silver Price
North America
Coins & Bars 14%
50
40 Jewelry
Industrial
Constant 2015 US$/oz

40
Tons (thousands)

30
Europe
30
15%
20
20
Asia
10 67%
10

0 0
2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

85
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: INDUSTRIAL APPLICATIONS INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Germany 813 859 853 632 824 791 673 664 651 651
APPENDICES

United Kingdom 960 739 686 550 640 647 591 557 546 545
Russian Federation 674 689 681 582 630 602 593 599 565 515
Belgium 919 863 758 603 568 510 478 444 443 435
Italy 340 352 350 281 307 287 267 261 260 250
France 322 334 336 232 274 248 223 218 211 213
Czech Republic 67 76 83 64 76 82 88 93 97 95
Switzerland 77 77 76 69 75 74 71 70 72 71
Turkey 48 50 51 42 44 46 45 46 48 50
Netherlands 49 49 49 40 47 46 45 44 45 44
Spain 58 59 58 53 55 45 38 35 36 36
Poland 23 24 25 21 23 22 22 22 23 24
Austria 17 17 17 15 16 16 16 16 15 16
Norway 17 16 15 11 13 12 12 12 12 12
Sweden 11 11 11 8 10 9 9 9 9 9
Romania 11 7 7 -3 6 6 6 6 6 6
Hungary 3 3 3 3 3 3 3 3 3 3
Portugal 3 3 3 3 3 3 3 3 3 3
Slovakia 3 3 3 2 2 0 3 3 3 3
Other Countries 11 11 11 5 6 10 10 10 9 9
Total Europe 4,425 4,241 4,074 3,214 3,620 3,458 3,195 3,114 3,056 2,990
North America
United States 4,765 4,636 4,649 3,868 4,702 5,175 4,126 3,963 3,850 3,940
Mexico 95 102 97 97 148 187 206 205 209 245
Canada 53 83 75 40 60 57 56 59 56 5
Total North America 4,913 4,821 4,821 4,006 4,910 5,419 4,388 4,227 4,115 4,239
Central & South America
Brazil 91 169 161 142 177 168 165 148 140 128
Argentina 48 42 31 24 28 28 27 27 26 25
Colombia 5 5 5 4 5 4 4 9 19 17
Other Countries 14 14 14 13 14 13 13 13 13 13
Total C. & S. America 158 230 211 183 223 214 210 196 198 183
Asia
China 3,455 3,972 4,525 4,251 4,876 5,104 5,145 5,590 5,788 5,252
Japan 4,034 3,844 3,201 2,028 2,921 3,133 2,811 2,877 2,751 2,839
India 1,368 1,455 1,486 1,415 1,575 1,676 1,553 1,468 1,373 1,256
South Korea 694 750 806 612 762 761 733 694 636 480
Taiwan 423 518 518 382 470 492 445 453 471 452
Hong Kong 208 222 213 171 199 199 193 180 152 137
Iran 83 83 106 55 59 55 55 54 55 55
Singapore 0 0 0 4 55 58 16 22 26 51
Thailand 28 28 33 31 32 32 32 32 32 32
GFMS, Thomson Reuters / The Silver Institute

86
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: INDUSTRIAL APPLICATIONS INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Indonesia 19 20 19 17 24 26 27 26 28 29
Other Countries 194 198 233 346 325 233 150 153 155 144

APPENDICES
Total Asia 10,505 11,090 11,140 9,312 11,298 11,769 11,159 11,549 11,466 10,727
Africa
Morocco 9 9 8 7 8 8 8 8 8 9
South Africa 4 4 4 4 4 4 4 4 4 4
Other Countries 10 10 11 9 11 9 9 9 9 9
Total Africa 22 23 23 20 23 21 21 21 22 22
Oceania
Australia 159 156 158 140 154 154 157 150 154 150
Total Oceania 159 156 158 140 154 154 157 150 154 150
World Total 20,183 20,560 20,427 16,875 20,228 21,035 19,129 19,257 19,011 18,311
© GFMS, Thomson Reuters / The Silver Institute

COMPONENTS OF INDUSTRIAL DEMAND WORLD SILVER INDUSTRIAL FABRICATION, 2015

Ethylene Oxide Real Silver Price Others

25,000 Photography Photovoltaic 50 2%
Brazing Alloys & Solders
North America
23%
20,000 40
Constant 2015 US$/oz

Other
15,000 30
Tons

Asia
10,000 20
58%
Europe
17%
5,000 10

Electrical and Electronics

0 0
2006 2008 2010 2012 2014
Note: Photovoltaic in "Other" category prior to 2011
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

87
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: ELECTRICAL AND ELECTRONICS INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China 1,391 1,667 1,893 1,722 2,058 2,148 2,161 2,343 2,419 2,173
United States 1,710 1,796 1,935 1,660 2,320 2,085 1,745 1,651 1,672 1,677
Japan 1,432 1,394 1,204 877 1,588 1,438 1,194 1,190 1,044 945
APPENDICES

Germany 613 665 674 488 664 631 534 529 521 519
India 335 440 468 502 531 534 547 470 501 451
Taiwan 320 363 384 309 377 395 353 367 384 368
S Korea 430 456 495 390 500 499 481 453 415 310
Russian Federation 359 375 375 321 353 339 334 338 315 285
Mexico 61 65 64 69 118 157 177 176 179 213
France 254 264 269 178 215 189 166 164 159 161
United Kingdom 138 139 145 107 120 125 122 121 125 127
Italy 112 121 127 107 121 103 86 78 75 72
Hong Kong 101 108 104 83 97 97 94 87 72 66
Czech Republic 30 35 39 30 36 39 42 45 46 45
Brazil 27 48 46 37 50 49 48 47 45 42
Turkey 32 33 34 28 29 31 29 29 30 31
Australia 23 23 22 20 21 22 21 21 20 21
Singapore - - - - 6 9 10 15 19 21
Other Countries 170 174 174 144 163 155 151 152 150 144
World Total 7,537 8,165 8,451 7,072 9,367 9,044 8,295 8,274 8,192 7,672
© GFMS, Thomson Reuters / The Silver Institute

SILVER FABRICATION: BRAZING ALLOYS AND SOLDERS INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China 604 664 805 826 890 949 975 1,079 1,169 1,037
United States 224 240 225 162 182 187 166 178 182 187
India 70 68 67 68 80 83 75 65 82 77
UK 95 76 72 57 72 76 67 66 68 69
Germany 105 112 107 71 87 86 70 68 66 65
Japan 122 123 114 70 105 94 77 71 63 59
Russia 60 62 62 54 59 56 56 56 55 51
South Korea 64 74 81 64 72 73 68 64 59 50
Canada 46 76 68 34 53 53 49 49 48 49
Italy 74 78 75 52 57 54 50 48 47 45
Switzerland 44 44 42 38 41 41 39 39 40 39
Taiwan 39 39 39 31 38 39 38 36 35 34
Brazil 26 26 25 27 30 31 30 30 29 26
Australia 17 17 17 15 16 18 18 17 17 16
France 26 27 26 17 20 19 17 16 16 16
Belgium 20 20 19 18 20 21 22 15 15 14
Mexico 15 16 14 12 13 12 12 12 12 14
Czech Republic 7 9 10 7 9 10 10 11 12 11
Other Countries 44 44 48 42 51 48 45 44 44 43
World Total 1,701 1,814 1,916 1,666 1,895 1,951 1,884 1,965 2,057 1,902
© GFMS, Thomson Reuters / The Silver Institute

88
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: PHOTOGRAPHIC USE INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
United States 1,442 1,071 875 728 630 556 521 498 476 459
Belgium 880 836 730 580 540 482 448 423 420 415
Japan 1,251 1,080 908 610 465 410 303 295 290 275

APPENDICES
United Kingdom 572 368 308 268 280 292 260 229 207 201
China 157 143 115 95 81 74 69 60 56 49
Russia 76 64 56 47 42 38 37 36 34 32
India 10 10 10 10 10 10 10 10 10 10
Brazil - 45 40 32 45 37 35 14 10 8
Czech Republic 6 5 4 4 3 3 3 2 2 2
Australia 4 4 3 3 3 2 2 2 2 2
Other Countries 25 12 4 0 0 0 0 0 0 0
World Total 4,423 3,638 3,054 2,377 2,098 1,905 1,687 1,569 1,508 1,452
© GFMS, Thomson Reuters / The Silver Institute

SILVER FABRICATION: ETHYLENE OXIDE CATALYST USE INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China 70 44 20 11 76 46 33 129 125 209
South Korea - 1 63 37 - 3 1 49 6 37
Singapore - - - - 46 45 - 1 - 23
United States -38 12 25 -69 2 1 39 22 3 13
Saudi Arabia 40 39 - 162 153 53 7 5 - 11
Thailand 28 20 4 12 - 2 - - - 6
Russia - 1 9 1 -2 -6 - 1 3 4
Taiwan 27 74 41 3 2 11 13 3 1 3
Iran 30 29 52 1 6 1 1 - 1 2
Germany 8 29 - 1 1 1 1 1 - 2
India -16 -7 1 -16 -1 2 20 20 1 1
Brazil - - - 4 - 4 24 1 - 1
Canada 2 1 1 1 3 - 2 6 3 1
Japan 1 1 2 -4 2 - 2 - 2 1
Mexico 1 -1 -1 1 6 1 - 1 - 1
Other Countries 54 2 13 4 -21 30 4 1 8 1
World Total 207 245 231 148 272 194 148 239 154 317
© GFMS, Thomson Reuters / The Silver Institute

89
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: JEWELRY AND SILVERWARE INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Italy 1,101 1,006 875 806 802 599 540 559 614 627
Russia 144 205 241 263 291 240 228 225 223 218
Turkey 224 194 207 175 153 134 139 162 192 184
APPENDICES

Germany 210 203 193 166 169 159 147 134 131 130
France 57 59 57 59 64 73 67 56 54 53
Spain 52 44 41 41 37 37 32 29 30 29
Greece 77 70 68 56 46 36 28 24 25 24
Sweden 26 24 22 20 20 19 19 18 18 18
Poland 55 62 62 49 41 24 19 20 19 17
Norway 34 25 26 19 20 18 18 16 17 16
United Kingdom 41 26 23 21 21 20 18 16 17 16
Denmark 18 18 17 15 16 16 15 14 15 15
Portugal 31 24 21 22 21 14 9 8 9 9
Netherlands 8 8 8 8 8 7 7 7 7 7
Switzerland 7 7 7 7 7 7 7 7 7 7
Belgium 5 5 5 4 4 4 4 4 4 4
Czech Republic 5 5 5 4 5 4 3 4 4 3
Finland 10 7 7 5 5 5 5 4 3 3
Austria 4 4 4 3 3 3 3 3 3 3
Cyprus 6 6 5 3 3 3 2 1 2 2
Croatia 2 2 2 2 2 2 2 2 2 1
Serbia 2 2 2 2 2 2 2 2 2 1
Other Countries 6 5 5 5 5 4 3 3 3 3
Total Europe 2,123 2,008 1,904 1,754 1,744 1,429 1,317 1,318 1,401 1,391
North America
Mexico 434 423 404 355 344 450 428 490 523 537
United States 465 442 404 362 400 370 342 381 420 446
Canada 36 34 30 28 28 27 26 26 23 25
Total North America 935 899 838 745 772 847 797 897 966 1,009
Central & South America
Brazil 54 54 54 57 64 50 50 95 90 67
Dominican Republic 19 20 28 46 42 28 29 41 43 46
Peru 19 18 19 22 23 19 19 21 21 20
Colombia 16 16 14 13 14 13 13 15 16 15
Argentina 12 14 12 10 11 11 11 13 13 12
Chile 10 10 10 10 10 9 9 12 12 12
Bolivia 9 7 14 16 14 9 9 10 9 9
Ecuador 10 10 10 7 7 7 7 9 10 9
Total C. & S. America 157 157 173 195 202 161 163 231 229 200
Asia
India 874 1,065 1,082 1,164 1,233 1,194 1,196 2,248 3,058 3,539
China 1,206 1,348 1,392 1,457 1,681 1,952 2,029 2,266 1,642 1,162
Thailand 1,146 1,136 1,037 946 947 798 662 692 634 732
Indonesia 158 151 149 150 168 190 207 215 206 215
South Korea 149 153 149 150 167 179 183 186 167 185
Japan 61 65 62 65 70 69 72 75 70 69
Vietnam 35 37 39 40 45 46 46 45 49 51
Bangladesh 45 45 46 45 43 41 40 28 30 50
© GFMS, Thomson Reuters / The Silver Institute

90
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: JEWELRY AND SILVERWARE INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Israel 61 59 55 46 42 32 29 34 37 39
Iran 49 49 48 44 43 40 37 37 34 33

APPENDICES
Cambodia 26 26 26 26 27 28 28 28 27 27
Saudi Arabia 21 22 22 23 24 26 28 28 27 26
Pakistan 32 32 32 31 28 24 23 20 20 26
Nepal 34 34 36 37 36 36 37 23 22 25
UAE 17 18 18 19 21 23 25 26 24 23
Malaysia 20 20 20 20 21 23 24 25 25 22
Sri Lanka 28 28 29 28 26 23 22 19 21 21
Taiwan 12 12 12 11 12 13 12 13 12 12
Philippines 8 8 8 8 8 8 9 9 9 9
Hong Kong 11 11 11 11 12 12 13 12 10 8
Bahrain 5 5 5 5 5 6 6 6 6 6
Other Countries 67 68 67 63 66 65 63 62 61 58
Total Asia 4,039 4,368 4,319 4,362 4,698 4,799 4,764 6,067 6,163 6,312
Africa
Egypt 48 50 46 42 39 17 24 27 29 27
Morocco 11 11 11 9 10 10 10 10 10 10
Tunisia 9 10 10 10 10 9 9 10 10 10
Other Countries 17 18 18 17 17 16 17 17 18 17
Total Africa 86 89 86 78 75 53 60 64 67 64
Oceania
Australia 24 24 23 23 25 26 27 28 28 29
Total Oceania 24 24 23 23 25 26 27 28 28 29
World Total 7,362 7,543 7,342 7,156 7,515 7,313 7,126 8,603 8,854 9,002
© GFMS, Thomson Reuters / The Silver Institute

WORLD JEWELRY & SILVERWARE FABRICATION WORLD JEWELRY & SILVERWARE FABRICATION, 2015

Others
10 3% Europe
Europe Asia 16%
North America Other
8

North America
Tons (thousands)

6 11%

Asia
2
70%

0
2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

91
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: JEWELRY INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Italy 876 802 703 663 679 512 469 495 555 572
Turkey 150 127 139 120 105 95 105 124 149 137
APPENDICES

Germany 119 120 122 115 119 115 113 104 103 102
Russia 51 70 79 92 104 84 80 82 87 91
France 50 52 49 54 59 68 63 53 51 50
Spain 40 35 35 38 34 35 30 27 29 27
Poland 53 60 61 48 41 23 18 19 19 17
Greece 33 32 36 32 28 22 18 16 17 16
UK 30 16 14 12 13 12 11 9 10 10
Sweden 12 11 10 9 10 9 10 10 10 10
Portugal 27 21 17 18 18 12 8 7 8 9
Denmark 8 8 8 7 7 7 7 7 7 7
Switzerland 7 7 7 7 7 7 7 7 7 7
Netherlands 7 7 7 7 7 6 7 6 6 6
Norway 5 5 4 5 5 5 5 5 5 4
Other Countries 25 24 25 20 20 18 17 16 17 16
Total Europe 1,492 1,397 1,315 1,246 1,254 1,032 966 988 1,080 1,081
North America
Mexico 372 380 368 327 323 433 412 472 505 520
United States 420 400 372 334 374 346 321 361 399 425
Canada 30 28 26 24 25 24 23 23 20 22
Total North America 822 808 766 685 722 803 757 856 925 967
Central & South America
Brazil 48 48 48 52 60 47 47 92 88 67
Dominican Republic 19 20 28 46 42 28 29 41 43 46
Peru 11 10 13 16 17 14 15 17 18 17
Colombia 6 6 6 7 7 7 7 10 12 10
Argentina 8 9 8 7 8 8 8 11 10 10
Other Countries 44 44 61 83 82 61 63 81 83 82
Total C. & S. America 117 117 136 165 174 137 140 210 211 186
Asia
India 369 603 601 647 707 679 724 1,315 1,936 2,254
China 943 1,065 1,121 1,243 1,444 1,693 1,762 1,955 1,452 1,053
Thailand 1,012 995 904 832 870 738 607 642 582 677
Indonesia 137 131 129 129 146 172 192 201 192 203
South Korea 126 130 127 131 147 162 168 172 154 174
Japan 60 64 61 64 69 68 71 74 70 68
Vietnam 32 34 36 37 42 44 44 43 47 50
Bangladesh 22 22 23 24 23 23 24 16 17 33
Nepal 33 33 35 36 35 35 37 22 21 25
Saudi Arabia 18 18 18 20 21 23 25 26 25 24
Cambodia 19 19 19 19 22 23 24 24 23 23
Malaysia 19 18 19 19 20 21 23 24 24 21
UAE 15 15 15 16 18 20 22 24 22 21
Pakistan 12 13 13 14 13 11 11 10 10 15
Sri Lanka 15 15 16 17 16 14 14 12 13 13
Israel 13 14 14 12 13 10 10 11 13 12
© GFMS, Thomson Reuters / The Silver Institute

92
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: JEWELRY INCLUDING THE USE OF SCRAP

(tons) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Taiwan 9 9 8 8 9 10 10 10 9 10
Iran 6 6 6 6 7 8 8 9 9 8
Philipines 6 6 6 6 6 7 7 7 7 8

APPENDICES
Hong Kong 8 8 8 8 9 10 11 10 8 7
Bahrain 4 4 4 4 5 5 5 6 5 6
Syria 6 6 6 6 7 6 5 4 3 2
Other Countries 26 27 26 23 24 23 24 25 25 24
Total Asia 2,908 3,256 3,217 3,322 3,674 3,807 3,829 4,640 4,669 4,730
Africa
Egypt 41 43 40 36 34 15 22 24 27 25
Morocco 8 9 8 7 8 8 8 8 8 8
Tunisia 6 7 7 7 7 7 7 7 7 7
Other Countries 13 14 15 14 14 13 14 14 15 14
Total Africa 69 72 70 64 62 43 50 54 57 54
Oceania
Total Oceania 21 21 20 21 22 24 25 26 26 27
World Total 5,429 5,670 5,524 5,502 5,909 5,846 5,767 6,774 6,967 7,045
© GFMS, Thomson Reuters / The Silver Institute

WORLD JEWELRY FABRICATION WORLD JEWELRY FABRICATION, 2015

Others
8 4%
Other North America North America
Asia Europe 14%

6
Tons (thousands)

Europe
4
15%

2 Asia
67%

0
2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

93
 WORLD SILVER SURVEY 2016

SILVER FABRICATION: SILVERWARE INCLUDING THE USE OF SCRAP (TONS)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Europe
Russia 93 134 162 171 187 156 148 144 136 127
APPENDICES

Italy 225 204 172 143 123 87 71 64 59 54

Turkey 74 67 68 55 48 39 34 38 43 46
Germany 91 83 71 51 51 44 34 29 29 28
Norway 29 20 21 14 15 14 14 12 12 12
Greece 44 38 32 24 18 14 10 8 8 8
Sweden 14 12 12 10 10 9 9 8 8 8
Denmark 10 10 10 9 9 9 8 7 7 7
UK 11 10 10 9 8 8 7 6 7 6
France 7 8 8 6 5 5 4 3 3 3
Finland 7 5 5 3 3 3 3 3 2 2
Other Countries 25 22 19 13 13 10 8 8 7 7
Total Europe 631 612 589 508 490 397 350 330 322 310
North America
United States 45 42 32 28 26 24 21 20 21 21
Mexico 62 43 36 28 21 17 16 18 18 18
Canada 6 6 4 4 3 3 3 3 3 3
Total North America 113 91 72 60 51 45 40 41 42 41
Central & South America
Colombia 10 10 8 7 7 6 6 5 5 4
Peru 8 8 6 6 6 4 4 4 3 3
Other Countries 22 23 22 17 15 13 13 11 10 7
Total C. & S. America 40 41 36 30 27 24 23 21 18 14
Asia
India 505 462 481 517 526 515 472 933 1,122 1,285
China 262 283 271 215 237 259 267 311 190 109
Thailand 134 141 133 115 77 60 55 50 52 55
Israel 48 45 41 34 30 22 19 23 24 27
Iran 43 43 42 37 36 32 29 28 26 25
Bangladesh 24 23 23 21 20 17 16 13 12 17
Indonesia 21 20 20 21 22 18 15 14 14 12
South Korea 23 23 22 20 19 17 15 14 12 11
Pakistan 20 20 19 17 15 13 11 10 10 11
Sri Lanka 13 13 13 11 10 9 8 7 8 9
Nepal 1 1 1 1 1 1 1 1 1 0
Other Countries 37 38 37 33 32 28 26 25 23 21
Total Asia 1,131 1,112 1,103 1,041 1,024 992 934 1,427 1,495 1,582
Africa
Africa 17 17 16 14 13 9 10 10 10 9
Total Africa 17 17 16 14 13 9 10 10 10 9
Oceania
Australia 1 1 1 1 1 1 1 1 1 1
Total Oceania 1 1 1 1 1 1 1 1 1 1
World Total 1,933 1,873 1,818 1,654 1,606 1,467 1,359 1,830 1,887 1,957
© GFMS, Thomson Reuters / The Silver Institute

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 WORLD SILVER SURVEY 2016

WORLD SILVERWARE FABRICATION WORLD SILVERWARE FABRICATION, 2015

Others Others
2.0 3%
Asia
Europe
Europe
16%
1.5

APPENDICES
Tons (thousands)

1.0

0.5

Asia
0.0 81%
2006 2008 2010 2012 2014
Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

TOP 20 SILVER PRODUCING COUNTRIES TOP 20 SILVER PRODUCING COMPANIES

Rank Output (tons) Rank Output (tons)

2014 2015 Country 2014 2015 2014 2015 2014 2015
1 1 Mexico 5,795 5,895 2 1 Fresnillo plc. 1,2 1,255 1,338
2 2 Peru 3,821 4,227 1 2 KGHM Polska Miedź S.A. Group 3
1,258 1,293
3 3 China 3,499 3,392 3 3 Goldcorp Inc. 1,145 1,257
6 4 Russia 1,434 1,572 4 4 Glencore plc. 4 1,105 1,139
4 5 Australia 1,675 1,566 6 5 Polymetal International plc. 893 998
5 6 Chile 1,574 1,505 7 6 Pan American Silver Corp. 2 812 812
7 7 Bolivia 1,345 1,306 8 7 Volcan Cia. Minera S.A.A. 4
700 771
8 8 Poland 1,264 1,291 11 8 Cia. De Minas Buenaventura S.A.A. 4 611 694
9 9 United States 1,180 1,100 9 9 Corp. Nacional del Cobre de Chile 635 663
10 10 Argentina 906 1,080 10 10 Tahoe Resources Inc. 2,5 631 635
11 11 Guatemala 858 863 5 11 BHP Billiton plc. 5,6 1,056 598
12 12 Kazakhstan 590 538 12 12 Coeur Mining, Inc. 2 535 495
14 13 Sweden 396 494 14 13 Sumitomo Corp. 5 441 493
13 14 Canada 493 380 13 14 Hochschild Mining plc. 7 503 459
16 15 India 261 374 NA 15 South 32 Ltd. 2,5 NA 434
17 16 Indonesia 240 304 20 16 Boliden A.B. 6
323 418
15 17 Morocco 274 296 16 17 Southern Copper Corp. 8 404 413
18 18 Turkey 205 202 23 18 Hindustan Zinc Ltd. 9 261 374
19 19 Dominican Republic 141 127 19 19 Hecla Mining Company 345 361
20 20 Armenia 115 117 15 20 Industrias Peñoles S.A.B. De C.V. 10 438 358
1 Including 100% of Penmont mines, excluding silverstream; 2 Primary silver producer;
Rest of World 940 953 3 Reported metallic silver production; 4 Includes minority partners; 5 Estimate; 6 Metal in concentrate;
7 Includes 100% from Pallancata, includes Moris; 8 Mined silver; 9 Integrated refined metal;
World Total 27,006 27,579 9 Excludes 100% of Fresnillo plc.

Source: GFMS, Thomson Reuters Source: GFMS, Thomson Reuters

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 WORLD SILVER SURVEY 2016

APPENDIX 2
NOMINAL SILVER PRICES IN VARIOUS CURRENCIES

Prices are calculated from the London price and the average exchange rate for the year.
In the case of India, the price shown is the one actually quoted in the Mumbai market.
APPENDICES

London India Thai Japan Korea China Eurozone* Mexico

US$/oz Rupee/kg Baht/oz Yen/10g Won/10g Yuan/kg Euro/kg Peso/oz
1981 10.487 2,650 228.83 744 2,296 575 390 0.26
1982 7.922 2,675 182.21 634 1,862 482 316 0.45
1983 11.415 3,435 262.89 873 2,851 726 479 1.37
1984 8.145 3,514 192.53 622 2,111 608 382 1.37
1985 6.132 3,880 166.54 470 1,715 579 296 1.58
1986 5.465 4,105 143.71 296 1,549 607 195 3.34
1987 7.016 5,124 180.46 326 1,855 840 208 9.67
1988 6.532 6,231 165.23 269 1,536 782 189 14.85
1989 5.500 6,803 141.36 244 1,187 666 170 13.54
1990 4.832 6,779 123.62 225 1,099 743 129 13.59
1991 4.057 6,993 103.51 176 956 694 111 12.24
1992 3.946 7,580 100.24 161 991 700 101 12.21
1993 4.313 6,163 109.20 154 1,113 799 117 13.44
1994 5.285 6,846 132.92 174 1,365 1,465 141 17.84
1995 5.197 6,864 129.49 157 1,289 1,395 122 33.36
1996 5.199 7,291 131.77 182 1,345 1,390 128 39.51
1997 4.897 7,009 153.60 191 1,498 1,305 139 38.78
1998 5.540 8,016 229.30 233 2,498 1,476 160 50.65
1999 5.218 8,022 197.38 191 1,994 1,389 158 49.90
2000 4.953 8,002 198.61 172 1,800 1,318 172 46.82
2001 4.370 7,420 194.15 171 1,814 1,163 157 40.82
2002 4.599 7,934 197.57 185 1,850 1,224 156 44.41
2003 4.879 8,138 202.39 182 1,869 1,298 139 52.64
2004 6.658 10,606 267.79 232 2,452 1,772 172 75.14
2005 7.312 11,083 294.07 259 2,407 1,926 189 79.68
2006 11.549 17,843 437.51 432 3,545 2,958 296 125.88
2007 13.384 18,794 461.98 507 3,999 3,273 314 146.26
2008 14.989 21,620 499.34 498 5,311 3,349 328 166.82
2009 14.674 23,815 503.12 441 6,024 3,223 339 198.30
2010 20.193 32,007 640.59 570 7,507 4,393 489 255.16
2011 35.119 55,638 1,069.25 900 12,508 7,296 811 436.30
2012 31.150 57,086 967.03 799 11,187 6,309 777 405.47
2013 23.793 48,618 730.53 743 8,366 4,708 576 303.52
2014 19.078 41,805 585.76 646 6,448 3,778 461 253.93
2015 15.680 36,146 537.10 610 5,704 3,168 560 248.91

* From 1977-1998, the DM/kg price is expressed in Euro/kg at the official conversion rate of 1.95583

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 WORLD SILVER SURVEY 2016

APPENDIX 3
REAL SILVER PRICES IN VARIOUS CURRENCIES (LOCAL CPI DEFLATED - CONSTANT 2015 MONEY TERMS)

Prices are calculated from the London price and the average exchange rate for the year.

APPENDICES
In the case of India, the price shown is the one actually quoted in the Mumbai market.

London India* Thai Japan Korea China Eurozone* Mexico

US$/oz Rupee/kg Baht/oz Yen/10g Won/10g Yuan/kg Euro/kg Peso/oz
1981 27.345 34,549 692.13 952 8,565 2,459 681 306.96
1982 19.458 32,314 523.84 790 6,479 2,021 525 335.53
1983 27.165 37,259 729.23 1,067 9,591 2,984 770 512.18
1984 18.580 35,047 528.75 744 6,941 2,430 599 307.94
1985 13.508 36,723 446.25 551 5,506 2,070 455 224.96
1986 11.818 35,670 378.66 345 4,838 2,028 300 256.20
1987 14.625 40,938 464.40 379 5,625 2,617 319 319.70
1988 13.093 45,613 409.00 311 4,347 2,052 286 229.27
1989 10.516 48,139 332.04 276 3,178 1,477 251 174.16
1990 8.765 43,990 274.60 247 2,711 1,600 185 138.04
1991 7.060 39,968 217.26 186 2,158 1,444 169 101.40
1992 6.666 38,708 201.94 168 2,102 1,368 147 87.57
1993 7.077 29,543 213.01 159 2,255 1,363 162 87.78
1994 8.451 29,834 247.05 178 2,603 2,011 190 108.94
1995 8.084 27,128 227.27 161 2,352 1,640 162 150.92
1996 7.857 26,426 218.75 186 2,339 1,507 168 133.02
1997 7.231 23,726 241.21 192 2,494 1,377 179 108.22
1998 8.055 23,968 333.53 233 3,868 1,570 204 121.94
1999 7.425 22,881 286.35 192 3,064 1,499 199 103.04
2000 6.817 21,939 283.65 173 2,705 1,419 215 88.29
2001 5.850 19,621 272.70 174 2,618 1,243 192 72.38
2002 6.060 20,119 275.75 191 2,598 1,318 189 74.96
2003 6.286 19,858 277.22 187 2,536 1,382 166 84.99
2004 8.355 24,977 357.06 238 3,211 1,816 202 115.89
2005 8.874 25,030 374.89 267 3,069 1,939 218 118.18
2006 13.579 37,933 533.12 444 4,420 2,935 337 180.16
2007 15.300 37,588 550.78 521 4,862 3,100 349 201.34
2008 16.501 39,910 564.24 505 6,170 2,996 355 218.46
2009 16.213 39,630 573.81 454 6,811 2,904 366 246.61
2010 21.950 47,563 707.21 590 8,243 3,831 523 304.66
2011 37.006 75,922 1,137.24 935 13,207 6,035 849 503.77
2012 32.158 71,286 998.69 830 11,559 5,084 798 449.69
2013 24.208 54,733 737.88 769 8,524 3,693 582 324.28
2014 19.101 44,247 581.03 652 6,494 2,909 462 260.82
2015 15.680 36,146 537.10 610 5,704 3,168** 560 248.91

* From 1977-1998, the DM/kg price is expressed in Euro/kg at the official conversion rate of 1.95583
**CPI Source: National Bureau of Statistics of the People’s Republic of China

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 WORLD SILVER SURVEY 2016

APPENDIX 4
SILVER PRICES IN US$ PER OUNCE

London Silver Market Fix* COMEX Settlement Price

High Low Average High Low Average
APPENDICES

1990 5.3560 3.9500 4.8316 5.3320 3.9370 4.8187

1991 4.5710 3.5475 4.0566 4.5450 3.5080 4.0355
1992 4.3350 3.6475 3.9464 4.3180 3.6400 3.9353
1993 5.4200 3.5600 4.3130 5.4430 3.5230 4.3049
1994 5.7475 4.6400 5.2851 5.7810 4.5730 5.2808
1995 6.0375 4.4160 5.1971 6.1020 4.3750 5.1850
1996 5.8275 4.7100 5.1995 5.8190 4.6760 5.1785
1997 6.2675 4.2235 4.8972 6.3350 4.1550 4.8775
1998 7.8100 4.6900 5.5398 7.2600 4.6180 5.4953
1999 5.7500 4.8800 5.2184 5.7600 4.8720 5.2142
2000 5.4475 4.5700 4.9525 5.5470 4.5630 4.9653
2001 4.8200 4.0650 4.3702 4.8050 4.0260 4.3597
2002 5.0975 4.2350 4.5990 5.1130 4.2160 4.5955
2003 5.9650 4.3700 4.8787 5.9830 4.3460 4.8916
2004 8.2900 5.4950 6.6578 8.2110 5.5140 6.6927
2005 9.2250 6.3900 7.3115 9.0000 6.4270 7.3220
2006 14.9400 8.8300 11.5492 14.8460 8.8090 11.5501
2007 15.8200 11.6700 13.3835 15.4990 11.4650 13.3762
2008 20.9200 8.8800 14.9891 20.6850 8.7900 14.9471
2009 19.1800 10.5100 14.6743 19.2950 10.4200 14.6961
2010 30.7000 15.1400 20.1929 30.9100 14.8230 20.2382
2011 48.7000 26.1600 35.1192 48.5840 26.8110 35.2485
2012 37.2300 26.6700 31.1497 37.1400 26.2470 31.1459
2013 32.2300 18.6100 23.7928 32.4090 18.5330 23.7469
2014 22.0500 15.2800 19.0778 22.0470 15.3920 19.0304
2015 18.2300 13.7100 15.6800 18.3460 13.6660 15.6576
*
“LBMA Silver price” as of 15 August 2014; operated by CME and administered by Thomson Reuters

US PRICES IN 2015 LEASE RATES, 2015*

COMEX Settlement Monthly Averages

US$ per ounce High Low Average Average 3-month 6-month 12-month
January 18.3460 15.7340 17.2000 June -0.13% -0.06% 0.18%
February 17.3790 16.1820 16.7202 July -0.09% 0.03% 0.18%
March 17.1220 15.3450 16.1944 August -0.12% 0.04% 0.20%
April 17.0950 15.6310 16.3201 September -0.03% 0.11% 0.29%
May 17.7120 16.1110 16.7999 October -0.10% 0.06% 0.28%
June 16.7830 15.5510 16.0133 November -0.06% 0.09% 0.26%
July 15.7260 14.4770 15.0024 December 0.02% 0.16% 0.31%
August 15.5170 14.0450 14.8940 *Jan-May 2015-n/a, calculated using silver forward offered rate and LIBOR;
September 15.2160 14.3190 14.7258 forward rates dataset was discontinued with effect from May 2014 and replaced with
October 16.2880 14.5060 15.7925 Silver Forward Lending Rate Composite.

November 15.4130 14.0080 14.4062 The lease rates shown here are indicative, reflecting the difference between prevailing
forward rates in the currency markets and in the silver market itself. They do not take
December 14.5050 13.6660 14.0506
into account the counter-party risk that any lender would apply to a transaction, or any
Source: COMEX other external influences, and should therefore be seen as a guide to the shape of the
forward curve, rather than absolute levels.
Source: Eikon, Thomson Reuters

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 WORLD SILVER SURVEY 2016

APPENDIX 5
LEADING PRIMARY SILVER MINES

2014 2015
Rank Mine Name Country Company Moz Moz

APPENDICES
1 Dukat 1 Russia Polymetal International plc. 19.5 22.3
2 Cannington 2 Australia South 32 Ltd. 24.7 22.2
3 Saucito Mexico Fresnillo plc. 15.4 22.0
4 Escobal Guatemala Tahoe Resources Inc. 20.3 20.4
5 Fresnillo Mine Mexico Fresnillo plc. 20.1 15.6
6 Uchucchacua Peru Compañía de Minas Buenaventura S.A.A. 12.1 13.9
7 Pirquitas Argentina Silver Standard Resources 8.7 10.3
8 Greens Creek United States Hecla Mining Company 7.8 8.5
9 San José Argentina Hochschild Mining plc. / McEwen Mining Inc. 6.5 6.7
10 Imiter Morocco Société Métallurgique d´Imiter 6.0 6.7
11 Gümüşköy 3 Turkey Eti Gümüş A.Ş. 5.8 5.8
12 Arcata Peru Hochschild Mining plc. 5.8 5.6
13 San Bartolomé Bolivia Coeur Mining Inc. 5.9 5.4
14 La Colorada Mexico Pan American Silver Corp. 5.0 5.3
15 Palmarejo Mexico Coeur Mining Inc. 6.6 5.1
1
including Goltsovoye; 2 reported payable metal in concentrate; 3 estimate

SILVER MINE PRODUCTION BY SOURCE METAL SILVER MINE PRODUCTION BY MAIN REGION AND SOURCE METAL

(million ounces) 2011 2012 2013 2014 2015 (million ounces) 2011 2012 2013 2014 2015
Primary North America
Mexico 73.0 73.5 78.6 81.6 87.5 primary 88.2 87.1 94.9 98.2 105.3
Peru 31.0 30.3 32.8 34.1 35.3 lead/zinc 65.2 82.9 76.0 80.1 70.1
Russia 17.3 19.5 22.4 24.3 27.6 copper 18.9 18.8 18.7 18.7 15.9
Other 97.4 97.4 98.4 113.0 114.3 gold 34.1 37.7 39.3 40.5 43.0
Total 218.7 220.7 232.3 253.0 264.7 other 1.9 1.8 2.4 2.5 2.7
Gold Total 208.3 228.4 231.3 240.1 237.1
Mexico 24.3 26.5 28.9 29.7 34.5 Central & South America
Argentina 4.8 5.2 6.0 9.4 13.6 primary 60.3 61.5 65.6 86.4 88.4
Russia 11.8 15.9 13.0 11.6 12.4 lead/zinc 80.4 83.8 86.8 91.4 88.9
Other 56.0 54.2 59.5 62.0 58.4 copper 48.5 46.6 51.7 63.4 73.8
Total 96.9 101.7 107.4 112.7 118.8 gold 36.3 32.2 35.1 39.9 44.7
Copper other 2.5 2.8 0.9 0.7 0.5
Poland 40.5 41.0 37.3 40.4 41.2 Total 228.0 226.9 240.1 281.9 296.3
Chile 26.2 23.3 24.0 37.4 37.1 Asia
Peru 20.6 21.3 24.9 24.0 35.0 primary 6.1 7.3 7.2 7.2 6.4
Other 74.0 74.5 83.0 78.2 79.1 lead/zinc 89.9 95.8 103.0 99.6 98.0
Total 161.3 160.0 169.3 180.0 192.5 copper 41.3 40.9 45.0 42.9 46.4
Lead/Zinc gold 9.1 10.5 11.7 12.7 12.7
China 73.6 77.0 80.3 77.8 75.6 other 1.6 1.6 1.6 1.6 1.6
Mexico 50.7 66.0 63.3 68.4 62.0 Total 147.9 156.2 168.4 164.1 165.1
Peru 50.6 53.7 54.5 56.4 55.5 Rest of the World
Other 99.8 105.4 111.6 115.2 112.7 primary 64.2 64.8 64.6 61.1 64.6
Total 274.7 302.1 309.8 317.8 305.8 lead/zinc 39.2 39.5 44.1 46.6 48.8
Other 6.0 6.2 4.9 4.8 4.8 copper 52.6 53.7 53.9 55.0 56.4
World Total 757.6 790.8 823.7 868.3 886.7 gold 17.3 21.3 21.3 19.5 18.4
other 0.0 0.0 0.0 0.0 0.0
Total 173.3 179.3 183.9 182.1 188.2
Source: GFMS, Thomson Reuters; Company Reports World Total 757.6 790.8 823.7 868.3 886.7

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 WORLD SILVER SURVEY 2016

APPENDIX 6
COMEX FUTURES AND OPTIONS TURNOVER AND OPEN INTEREST, AND LONDON BULLION MARKET (LBMA) TRANSFERS

Comex LBMA Clearing Turnover 3

Number of Contracts Ounces
APPENDICES

Futures Options transferred Value Number of

Turnover 1 Open Interest 2 Turnover 1 Open Interest 2 (millions) (US$bn) transfers
2014 Jan 915,025 147,000 170,972 194,577 144.7 2.9 733
Feb 1,498,846 135,849 186,896 183,306 185.7 3.9 907
Mar 973,739 150,831 120,590 193,009 134.0 2.8 779
Apr 1,388,927 153,088 146,215 197,168 122.1 2.4 732
May 883,117 160,695 125,040 216,057 136.9 2.7 898
Jun 1,459,081 156,636 179,043 211,176 163.4 3.2 843
Jul 957,168 160,918 116,897 222,635 121.7 2.6 719
Aug 1,216,690 161,839 114,805 210,879 121.0 2.4 709
Sep 990,802 173,778 188,635 248,189 142.2 2.6 775
Oct 1,013,749 179,095 180,744 266,262 135.8 2.3 669
Nov 1,435,078 156,064 199,190 197,929 172.3 2.8 772
Dec 964,739 151,410 124,625 183,571 152.8 2.5 795

2015 Jan 979,506 163,955 166,782 198,539 145.5 2.5 710.0

Feb 1,195,969 160,735 96,286 168,559 142.6 2.4 663.0
Mar 875,819 171,077 95,656 173,472 149.7 2.4 697.0
Apr 1,431,363 179,953 97,002 166,305 112.9 1.8 620.0
May 886,343 178,002 103,569 185,094 148.3 2.5 684.0
Jun 1,499,551 198,023 123,818 149,190 134.3 2.2 623.0
Jul 988,399 186,246 121,351 164,289 155.2 2.3 644.0
Aug 1,510,998 157,520 102,749 148,064 142.2 2.1 712.0
Sep 822,288 158,046 77,955 146,191 163.4 2.4 691.0
Oct 1,107,547 169,495 90,876 150,301 136.4 2.1 686.0
Nov 1,291,748 162,326 84,249 94,670 154.6 2.2 714.0
Dec 864,875 168,442 64,371 94,193 166.1 2.3 732.0

1
Monthly total; 2 Month-end; 3 Daily average; Source: LBMA, COMEX

SILVER ETP HOLDINGS

iShares ETF Sprott Value

(Moz, end-period) Silver Trust Securities* ZKB Silver Trust Other** Total US$ Bn***
2014 Q1 328.3 66.9 84.0 49.3 121.0 649.6 12.97
Q2 322.7 67.7 83.0 49.3 118.3 641.0 13.38
Q3 349.9 63.5 80.9 49.3 117.7 661.3 11.32
Q4 329.6 62.5 77.1 49.3 117.1 635.5 10.15

2015 Q1 327.3 69.1 75.4 49.3 139.0 637.2 10.58

Q2 325.2 69.3 74.2 49.1 139.8 635.0 9.97
Q3 318.5 69.3 71.6 49.0 140.9 626.0 9.17
Q4 318.9 65.9 69.1 49.0 138.6 617.8 8.54
*Includes ETF Securities LSE, Australia, NYSE, GLTR and WITE
**Other: includes Julius Bär, DB Physical Silver, iShares Silver Bullion ETF, Silver Bullion Trust, Mitsubishi UFJ Tokyo, iShares Physical Silver ETC, Central Fund of Canada, Source Physical Silver,
Royal Canadian Mint ETR
***Using the quarter-end London price

Source: Respective issuers; GFMS, Thomson Reuters

100
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WORLD SILVER SURVEY 2016

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