When people think of uses for silver the first thing that comes to mind is jewelry, followed by coins, but the largest single component of physical silver demand actually is industrial applications.
About 55 percent of all silver consumed is for industrial use including electronics, medicine, water purification, solar cells, chemical catalysts, and others. Although photography once used a lot of silver, digital photography has cut into that application.
The remaining demand is taken up by jewelry, coins and silverware.
In 2016, total worldwide demand for silver totaled 1,027.8 million ounces, which was down about 11% from extremely high levels the previous year due to a decline in retail investment.
Industrial demand slipped nominally even though electrical generation from solar cells – which use silver – continues to grow around the world and even hit new record levels in 2016, with a 34% rise in demand. Still, it was not enough to offset falls across the other industrial sectors.
On a country basis, China consumes the most silver followed by the United States and Japan.
Silver is a crucial part of the production of ethylene oxide, a chemical compound used to produce many products like anti-freeze, formaldehyde and plastic, and demand in this sector rose slightly reaching a record high of 10.2 million ounces.
The largest declines in demand were from coin and bar investment, which declined 29% in 2016 to 206.8 million ounces, most of the fall coming from a drop in Indian consumption.
Due to stagnant economic conditions worldwide, jewelry fabrication fell 9% in 2016 to 207 million ounces, a four-year low. Drops were most pronounced in China and India.
Material and statistics in this section were adapted in part from the Silver Institute’s World Silver Survey 2017.