Strong Investor Interest and Industrial Usage Lead to Sturdy Silver Demand in 2014

WASHINGTON, DC--(Marketwired - Jul 17, 2014) -  Investor and industrial consumption of silver has advanced at a healthy pace in 2014, reflected in the silver price increasing 5 percent as of July 15 from the beginning of the year.  

Building on an impressive 2013, investors continued to boost silver holdings in the first half of 2014. Silver exchange traded funds (ETF) backed by physical silver added 7.0 million ounces (Moz) of silver bullion through June; in contrast, gold ETF holdings dipped by 1.4 Moz ounces over the same time period. Globally, silver bullion coin sales are up 4.5 percent through the 1^st quarter of 2014, according to precious metals consultancy Thomson Reuters GFMS. U.S. Mint sales of American Eagle Silver Bullion coins maintained near record level sales, totaling 24.1 Moz for the first six months of 2014, just shy of the 25.0 Moz sold in the first half of 2013, threatening to overtake the record sales of 42.7 million American Eagle coins acquired by investors last year. Other silver investment products, such as silver bar consumption, appear to be easing so far this year after a strong showing in 2013.

Industrial demand for silver in critical sectors, such as ethylene oxide production, has increased significantly in the first half of the year and is expected to increase 23 percent this year to 8.0 Moz, according to Thomson Reuters GFMS. Ethylene oxide is a vital building block chemical, critical to production of detergents, solvents, plastics and a broad range of organic chemicals, and is an example of the unmatched importance of silver in industry. 

Demand for silver in the photovoltaic industry has been driven by a global increase in renewable energy over the past decade, leading to a proliferation of solar module production. Metals Focus, the precious metals consultancy, forecasts that silver demand in photovoltaics will rise by close to 10 percent in 2014.

Another positive for silver is growing global semiconductor sales. According to the Semiconductor Industry Association, semiconductor sales were up 8.8 percent in May from a year ago. This increase is encouraging for silver demand because silver is used extensively in electronic products that contain semiconductors. Semiconductor sales in the first quarter of the year totaled $78.5 million globally, the highest first quarter total on record.

These two categories, investment and industrial demand, are important to the strength of the silver market and last year accounted for a combined 77 percent of total silver demand.

The Silver Institute is a nonprofit international industry association headquartered in Washington, D.C. Established in 1971, the Institute's members include leading silver producers, prominent silver refiners, manufacturers and dealers. The Institute serves as the industry's voice in increasing public understanding of the many uses of silver, and also creates programs across many platforms that benefit the white metal. For more information on the Silver Institute, or silver in general, please visit: www.silverinstitute.org.