WASHINGTON, DC, Feb. 05 28, 2019 (GLOBE NEWSWIRE) — Last year, the silver market faced a challenging environment that translated into lackluster price performance. Preliminary estimates indicate a slight increase of 0.3% in total supply while demand contracted by 3%. The slowing Chinese economy, coupled with rising US interest rates, rising equity markets and global trade tensions, has affected price performance in many markets, including gold and silver. money.
This year, we expect sentiment to be more supportive of the silver market. The start of 2019 has already turned out to be good for silver investors. The US Mint, for example, sold 12% more American Eagles in January compared to January 2018. In addition, the expected slowdown in the US Fed’s rate hike cycle should also benefit silver, which, relative to gold, has a very attractive price based on the high gold/silver ratio of around 82.
Against this background, the Silver Institute provides the following information on silver market trends in 2019.
Industrial Manufacturing Silver Demand, responsible for about 60% of total demand, is expected to increase slightly in 2019. We expect most sectors to see reasonable growth based on the use of silver in a wide variety of applications. Silver demand from brazing alloys and solders as well as electrical and electrical applications is expected to increase further this year. This is due to continued demand from the automotive sector, which uses an increasing number of applications, such as safety devices, window demisting and infotainment systems, as well as for electric and hybrid vehicles. We also anticipate growth in the use of silver in a variety of other industries, such as water purification, chemical applications, LED lighting, flexible electronics and displays as well as applications. antimicrobials in textiles.
Photovoltaic (PV) demand has grown significantly in recent years due to the accelerating pace of various countries diversifying their energy generation portfolio away from conventional fossil fuels and in favor of a higher share of renewable sources. Even with legislative changes in China, coupled with global overstocking and continued attempts to save, PV demand will continue to strongly support the use of cash, as many governments will continue to offer incentives to install more of solar energy. Indeed, global solar capacity additions should exceed 100 GW per year over the 2018-2022 period. Even though the growth of solar capacity additions in China slowed slightly last year, this slowdown is expected to be compensated by other countries, such as India, Australia and various European countries in the coming years.
India is expected continue to be one of the biggest consumers of silver in 2019. Silver imports reached nearly 225 million ounces (Moz) last year, more than 220% more than in 2017. Silver imports fell in India after the implementation of the demonetization plan in late 2016 and the introduction of the Goods and Services Tax (GST) in mid-2017, which reduced the amount of cash in circulation that was previously used for money imports.
Jewelery request is expected to post a solid year of growth in 2019, with Thailand expected to be one of the upside drivers. In the United States, silver jewelry will remain a popular alternative to low-karat gold items, driven by many issues, but especially by women’s self-purchases. Globally, silver jewelry is expected to continue to grow, due to its diversity of designs, excellent quality and excellent retail margins.
Exchange Traded Products (ETP) are expected to increase by 8 million ounces this year. Silver-backed ETPs are “stickier” than other precious metals products because the majority are held by retail investors rather than institutional investors.
Physical investment in silver demand is expected to increase by around 5% in 2019. Demand for bullion coins was strong in the United States in January of this year, and we expect sentiment in Europe, which grew by 6% in 2018, and in India, is favorable to global growth. growth over the year. Demand for bullion coins in the United States fell last year, but non-bullion silver coins rose 42% for the second year in a row.
Silver mine production is expected to fall by 2% this year. While we expect a slight increase in silver recovered from gold mining, all other primary and by-product production is expected to fall, with the exception of supply from lead/zinc operations which is expected to increase this year.
Silver Scrap Supply should recover slightly in 2019, after four consecutive years of stable scrap flows. This will mainly depend on waste generated by industrial processes, but also on jewelry items, which tend to be highly price elastic.
silver market equilibrium (total supply minus total demand) in 2019 should be the third consecutive year, within the margin, where all the silver produced is absorbed by the various downstream sectors.
We expect the price of silver to strengthen this year to post an average price of $16.75, a 7% increase from the average price of 2018 based on the LBMA silver price. Stock market volatility is causing investors to look for alternative options such as precious metals, which will boost silver investing.
The silver institute
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