For the first time in 14 years, silver mine production dropped globally, according to World Silver Survey 2017, released May 11 by The Silver Institute.

The 0.6 percent decline in 2016 to a total of 885.8 million troy ounces was the result of lower lead, zinc and gold mining from which silver is a byproduct.

Connect with Coin World:  

Sign up for our free eNewsletter
Like us on Facebook  
Follow us on Twitter

“Coupled with less silver scrap supply to the market, which posted its lowest level since 1996, as well as a contraction in producer hedging, total silver supply decreased by 32.6 million ounce in 2016,” according to the survey. Reductions in lead, zinc and gold mine production accounted for 15.9 million ounces of that total, according to the survey.

The 104-page survey was produced on behalf of The Silver Institute by the GFMS Team at Thomson Reuters.

Despite higher silver prices, silver scrap supply fell to 139.7 million ounces.

Investment demand

Demand for silver coins and bars dropped in 2016 to 206.8 million troy ounces, from 290.7 million ounces in 2015.

“The annual average silver price posted an impressive 9.3 percent increase in 2016, its first rise since 2011,” according to The Silver Institute. “Assisting the price was last year’s supply and demand scenario, which led to another annual silver market deficit, the largest in three years and the third largest on record, reaching 147.5 million ounces. The average price last year, at US$17.14, registered 28 percent higher than 2007, when the silver price averaged US$13.38.”