SILVER

Shining more, getting brighter

Overview

The Silver Institute predicts global supply to rise by 4% from CY 2022 to 1.005 billion ounces in CY 2023, fuelled by higher mine output. Silver mine production, due to new silver mines in Mexico and increased output from Chile gold operations with high silver content, is expected to reach 0.873 billion ounces – the highest level since 2016 – in CY 2023, with a growth rate of 5%. The silver recycling growth is expected to be 3%, driven mostly by industrial recycling.

Global Demand

The global silver demand rose by 18% in CY 2022 to 1.24 billion ounces and is expected to dip to 1.17 billion ounces in CY 2023. The global industrial demand for silver is expected to increase by 2.6% y-o-y to 550 mn ounces in CY 2023, lifted by vehicle electrification and the growing commitment of governments to green infrastructure.

Indian Demand and Opportunity

In CY 2022, silver demand rebounded in India, after the lean years of 2020 and 2021. India recorded the highest imports of 330 mn ounces in CY 2022, due to growth in demand after the lockdown years and good investment demand when prices went low.

The solar panel manufacturing industry has been consuming increasingly more silver as the government is offering production linked incentives (PLIs) to promote the usage of renewable sources of energy. Silver demand in the solar power sector is expected to grow further as nations look to develop green energy. Additionally, investment in silver (both physical and as exchange traded fund (ETF)) is increasing. The recent launch of silver ETF in India witnessed a good response.

The coin demand in India, driven largely by gifting and religious purposes, is insulated from price fluctuations. Though silver coins have been in use since long, the demand has increased in recent years because of the variety of product offerings and marketing efforts from mints and refineries.

India set up the India International Bullion Exchange (IIBX) in August 2022 with the aim to improve transparency in the local gold market and provide traceability of the metal across the supply chain. However, the platform currently allows only gold trading. Bullion imports and trading of silver is expected to begin eventually, which will significantly boost shipments through the exchange.

Business Overview

Hindustan Zinc is India’s sole primary silver producer. The Company produced 714 MT (23 mn ounces) in FY 2022-23 and sold the entire quantity in the domestic market. Globally, Hindustan Zinc ranks 5^th amongst the top silver producing companies. Exclusively catering to the domestic market, the Company’s production finds use in industry (electrical contacts, pharmaceuticals, solder and alloys), jewellery and silverware. The Company is offering spot sales of silver through e-auction to reduce manual intervention, thereby providing buyers equal opportunity to compete, while ensuring complete price transparency.

Hindustan Zinc is India’s sole primary silver producer. The Company produced 714 MT (23 mn ounces) in FY 2022-23 and sold the entire quantity in the domestic market