Indian Silver Imports Rebound From 2016 Lows in Advance of Diwali.
Indian silver demand edged up in September as Indian buying returned in anticipation of Diwali and the wedding season. Indian silver imports in September were 225 tons up 9% from 207 tons in August and up 165% from 85 tons in July. While gold takes the lion’s share of Indians’ rupees during the festive season, silver is also sold in large amounts.
Because India has virtually no operating gold mines and a small silver mining industry precious metal demand has to be met from imports.
In 2016, Indian silver imports have fallen nearly 60% in 2016 from 2015, but are on pace to consume about 15% of the annual silver mining supply or the approximately the equivalent of the entire silver mining output of Mexico, the world’s largest silver mining country. Last year, India imported nearly 275 million ounces of silver or approximately one third of global silver mining production. India is on pace to import about 120 million ounce of silver in 2016 or approximately 15% of global silver mining production.
While Indian silver imports in 2016 have slowed from last year’s torrid pace, as of September, India had imported over 2,600 tons (approximately 83+ million ounces). At the current pace, India will import approximately 3700 tons (approximately 120 million ounces) of silver this year or about 20% of annual silver mining production.
Indian Silver Imports vs. U.S. Mint Sales
India imported over 2600 tons or approximately 85 million ounces of silver from January 2016 – September 2016 which is more than the amount of silver used by the U.S. Mint in 2015 to produce a record 47,000,000 one ounce American Silver Eagle coins and the 34 million American Silver Eagle coins minted through September 2016.
Indian Silver Imports 1999 – April 2016
India’s silver demand has increased exponentially over the past ten years. India, however, has historically been known as a nation with a penchant for gold. Indeed, India has gold giving holidays as the yellow metal is revered for its beauty and as a store of generational wealth. Yet, the Indian government has placed import duties on gold, added a sales tax and initiated a gold monetization scheme designed to get Indians to turn in their gold to in exchange for interest bearing bonds.
While the Indian government’s anti-gold initiatives have dented official gold demand in India, black market sales and imports continue. Silver has been a direct beneficiary of the campaign against gold. Indians prize silver for its beauty and also give it as gifts. It’s not substitute for gold but it is viewed favorably.
Solar, Jewelry, Adornment and Investment Demand For Silver In India
Indians use silver to adorn their homes and temples. In addition, there are many solar energy projects under way in India that require silver for the construction of solar panels. India’s silver requirements for its solar industry are estimated to be in the tens of millions of ounces a year. Indians also purchase tens of millions of ounces of silver in the form of jewelry, silverware and silver coins and bars.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.