India was the second largest importer, after China. China’s imports increased three per cent, to 247 moz (7,683 tonnes) but it usually imports for re-exporting after refining the metal. In 2014, China was also the largest supplier of silver to India, at almost 2,000 tonnes.
India’s demand for jewellery surged by 47 per cent to 62.2 moz, according to a survey by GFMS Thomson Reuters for the Silver Institute.
In 2014, global demand for silver was 1,066.7 moz or 33,179 tonnes, about four per cent lower than that of the previous year. Had India’s imports not increased by as much as it did, the fall would have been much more.
Higher import had continued in the first quarter of 2015. In January-March, around 1,500 tonnes arrived in country, against 1,125 tonnes in the March quarter of 2014. Indians buy for jewellery; some also look for better investment returns, in rupee terms.
The fall in global demand was largely due to a fall of almost a fifth in investment demand, from 243.6 moz to 196 moz in 2014. The report referred to had said silver is less attractive from a returns perspective because of the impending action of the US central bank to raise interest rates. Reuters says silver prices will decline 14 per cent this year on this speculation, with a rise in US rates spurring a shift to alternative assets.
Silver will drop to $16.50 an oz from the average of $19.08 in 2014, said Andrew Leyland, manager of precious metal demand at Thomson Reuters GFMS, in a telephonic interview.
About 56 per cent of total global demand came from the industrial sector and 40 per cent was from jewellers and investors. Of the total supply (1,061.8 moz), 83 per cent came from mines; 16 per cent came from scrap.