Industrial silver fabrication is expected to drop nearly 9% in 2020 due to the effect of COVID-19 on end-use industries, especially in March-April, according to a Nov. 18 report commissioned by the US-based Silver Institute.
“Industrial fabrication … is forecast to drop by 9% percent this year to 466.5 million oz, a five-year low,” according to the report from UK precious metals research firm Metals Focus.
“This reflects the impact of lockdown restrictions, with supply chains heavily disrupted, end-users adopting an increasingly cautious approach to inventory replenishment and factories facing labor supply problems,” the report said.
Metals Focus estimates that photovoltaic demand will fall by 11% to about 88 million oz, still a historically high level.
“The use of silver in the automotive sector is seeing a slightly steeper decline, as the estimated 17% drop in global light vehicle production outweighs ongoing gains in the use of silver in each vehicle,” Metals Focus said.
“One bright note is that sectors connected to home renovation have often performed better because of the trend towards increased teleworking,” they added.
Silver mine production is expected to fall 6.3% in 2020 to 780.1 million oz, according to the report.
“This reflects COVID-19 lockdowns implemented by several major silver producers during the first half of the year, which required mines to temporarily halt production. This led to lower output from Mexico, Peru and China,” Metals Focus analysts said…
View entirety: S&P Global Platts