Above-ground silver stocks show little correlation with price movements despite reaching 19.3 billion ounces in 2023, equivalent to 16 times annual demand, according to a new report from The Silver Institute.
The study, conducted by Precious Metals Insights, reveals that government silver holdings have fallen below 100 million ounces, down dramatically from the 1960-1970 period when official sector sales averaged over 200 million ounces annually.
Private sector bullion holdings, which have grown steadily since 2008, now stand at 8 billion ounces, representing 6.7 years of total silver supply. Exchange Traded Products account for 964 million ounces of these holdings, demonstrating the strongest price sensitivity among all silver stocks.
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Fabricated product inventories reached 11.3 billion ounces, showing less price responsiveness than bullion stocks.
The research highlights a significant decline in recycling’s contribution to total silver supply. After averaging 33% during 1974-1985, scrap recycling fell to 20% of supply from 1986-2023, further dropping to 15% over the past decade.
Major price movements are needed to drive significant changes in above-ground stocks, the report finds. Current private sector accumulation could pressure prices downward if market sentiment shifts, similar to the market dynamics observed in the 1990s.
Industrial applications have transformed silver demand patterns, with photovoltaic use surging from minimal levels in the early 2000s to 194 million ounces in 2023, while traditional photographic demand has sharply declined.
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