The Silver Market in 2018 According to the Silver Institute

The silver market balance is expected to be slightly in deficit

Article's Main Image

The demand side of silver:

The demand of silver is expected to grow in 2018, supported by the demand from industrial applications as electrification is increasing and by the worldwide demand for large and small scale solar panels. A positive contribution is also expected from the demand of jewelery, silver bar and coin.

The Silver Institute anticipates silver bar and coin demand to benefit from some investment flowing back into the grey metal and foresees a 3% increase in silver exchange-traded-products (ETP) holdings in 2018 from a level of 670 million ounces as of Dec. 30, 2017.

India, which is one of the biggest consumers of precious metals in the world, is expected to import 180 million ounces of silver in 2018. The Indian imports will be backed by a strong silver demand from jewelery fabricators.

The supply side of silver:

According to the Silver Institute, the silver output will narrow by a further 2% in 2018 to 870 million ounces of silver. Byproduct producers should provide some support to a declining supply of the metal because of disruptions at operations and a decline in capital expenditure among the main producers of the grey metal over the last five years.

The silver market balance, calculated as total supply less total demand, is expected to be slightly in deficit, also in 2018.

The Silver Institute expects a volatile ride in the price of silver this year.

Silver averaged $17.0445 per ounce in 2017, down nearly 10 cents from 2016.

The grey metal closed at $17.05 on Jan. 18, 2018, and gained 0.4% year to date.

Disclosure: I don't have any position in any security mentioned in this article.