Limited impact on Silver industrial demand from US-China trade war


NEW YORK (Scrap Register): Globally, a trade war likely will have limited impact on the industrial use of silver, said the consultancy Metals Focus.

Analysts offered the assessment after the International Monetary Fund this week downwardly revised its forecast for global economic growth in 2018 and 2019 due mainly to the US-China trade war.

Generally, investors have shrugged off trade-war fears, as reflected by a strong stock market, Metals Focus says. Nevertheless, analysts cite data showing that industrial demand is important to the silver market.

They look for industrial silver demand to rise 0.2% to 514 million ounces, which would be the highest total of the decade. “In terms of overall supply/demand, industrial offtake now accounts for 54% of the global total (vs. 50% in 2010),” Metals Focus said, calling this demand a “success story” despite efforts to thrift on silver.

“Regarding the direct impact of the trade war on silver consuming industries, in most cases we believe that, at least at a global level, this will be limited,” Metals Focus noted.

“A globalized supply chain should allow many manufacturers to shift sourcing and production across different geographies. Naturally, there will be winners and losers, but the industry as a whole should be able to adapt to the new regime.”

Still, Metals Focus said it looks for a market surplus this year of 48 million silver ounces, noting that other forms of demand, such as physical investment, have declined.

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