World Silver Demand in 2021 the Highest in Eight Years

After the decline in mineral demand experienced by the mining industry in 2020 due to COVID-19, forecasts are optimistic for 2021. According to the Silver Institute, silver demand will increase in 2021 to 1.025 billion oz, the highest level in eight years. “There is a prospect of economic recovery among commodities, as manufacturing indicators continue to recover,” Carlos Hernández García, Senior Analyst at Mercados Bursátiles en Casa, told El Economista. According to the London Bullion Market Association, the average annual silver price increased from US$16.19 in 2019 to US$20.52 last year, representing a 27 percent increase. 

According to several analysts, the current economic conditions in most developed countries will continue to boost these metals, either because of their importance as a safe haven or because of their importance in the development of manufactured products. “Precious metals have enjoyed impressive gains in 2020 as the COVID-19 pandemic has triggered investor appetite for safe-haven assets and triggered an unprecedented wave of supportive fiscal policy measures by major economies. Gold soared to a new all-time high, also triggering higher silver and platinum prices. Although palladium has been less affected by this move, its favorable fundamentals have continued to provide support,” Metals Focus, a consulting firm, noted in its Precious Metals Investment Focus 2020/21 report.

This projection was supported by several analysts present at Mexico Mining Forum 2021, organized by Mexico Business News in collaboration with Mexico Business Events. During the forum, Eric Fier, CEO of SilverCrest Metals, said the Las Chispas mine in Sonora would be one of the major contributors to help achieve that demand. “We expect to have revenues of US$30 million by the end of this year,” he said, adding that there were more satellite fields to be explored.

During Mexico Mining Forum 2021, Fernando Alanis, President of CAMIMEX, highlighted the position of the mining industry as an essential sector for the reactivation of the Mexican economy and its role in meeting global metals demand. According to him, Mexico is among the world’s Top 10 producers of 17 minerals and mining accounts for 2.3 percent of national GDP and 8.1 percent of the country’s industrial GDP. “Mexico is a mining country. Seventy percent of the national territory has mining potential, and currently, only 30 percent has been explored. Mining has historically been concentrated in the center and north of the country. However, this activity can benefit more states,” he said.