Total demand in India for silver in coins, investment bars,
silverware, jewelry, and industrial applications remains above total
supply from imports, recycling and mine supply, according to the
Indian Silver Market Study, prepared by
the precious metals consultancy Metals Focus for The Silver Institute.
India is the world's 14th largest produce of silver, usually as a
byproduct from zinc mining, according to the study. At 14 million
ounces in 2016, the total fell well short of the amount of metal
needed to satisfy demand from all categories of the market, according
to the study.
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From 2010 to 2015 inclusive, total bullion imports reached record
highs, hitting a peak of 243 million ounces in 2015. With the
inclusion of 2016 imports, the silver import totals since the start of
2010 totaled 990 million ounces, according to the study.
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While demand for silver coins in 2016 dropped slightly in 2016 to
7.1 million ounces from 7.2 million ounces in 2015, investment demand
plummeted in 2016 to 29.5 million ounces, from 103.2 million ounces in
the peak 2015 year.
A government crackdown on unaccounted for money resulted in a sharp
decline in 2016 demand for bars weighing 15 to 30 kilograms each,
according to the study.
“Following uninterrupted growth since the start of this decade,
Indian physical bar investment suffered a steep decline in 2016,”
according to the study. “With a two thirds drop to 36.5 million
ounces, bar and coin sales hit their lowest level in six years. We
attribute part of this collapse to the recovery in silver prices in
2016 which saw some investors book profits. It is worth remembering
that, within a time frame of just six years, Indian investors had
accumulated an extraordinary 460 million ounces of silver bars and coins.”