Silver demand up 10% in H1 due to investor demand

London (July 12)  Silver demand by investors was up 10 percent, said the Silver Institute yesterday. The institute said there was "...remarkably strong growth in silver-backed exchange-traded products (ETPs), which have posted successive all-time highs this year, together with solid silver coin and bar investment."

The price for the metal has gotten better. The institute noted that the silver price averaged US$16.65 through to the end of June.

"Having fallen sharply in mid-March, the silver price has since recovered strongly, rising by 56 percent to reach US$17.84 at end-June; it has since broken through the US$18 barrier," wrote the institute.

The Silver Insitute described the inflows into silver ETPs as being "impressive" this year.

"As of June 30, global holdings reached a fresh all-time high of 925 million ounces (Moz), which is roughly 14 months of mine supply. The ETP growth in the first half 2020 of 196 Moz comfortably surpassed the highest annual inflow of 149 Moz set in 2009. North American listed funds accounted for some 90% of the ETP inflows since March," writes the institute.

Retail bullion coin sales are estimated by the report's authors to be up 60 percent year-on-year.

"Silver bar and coin sales surged in response to a deteriorating economic outlook linked to the global COVID-19 pandemic, leading to some supply-chain disruptions. This saw dealer stocks for several silver investment products quickly depleted, resulting in extended delivery lead times and higher premiums."

Silver could also gain from supply disruptions caused by COVID-19.

"Global silver mine supply is expected to continue its decline, given the temporary production stoppages of mining operations in several significant silver mining countries due to the Covid-19 outbreak. Even with most of the mining operations now back online, global silver mine production is forecast to dip by 7 percent in 2020."

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