A significant surplus in silver is projected by the end of calendar year 2018, according to a survey conducted by GFMS, Gold Fields Mineral Services, the research and precious metals consultancy arm of Refinitiv.

A 2018 interim silver survey conducted on behalf of The Silver Institute projects a surplus of the precious metal for the calendar year.

The survey was conducted by GFMS, Gold Fields Mineral Services, the research and precious metals consultancy arm of Refinitiv, formerly Thomson Reuters.

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The survey pegs the surplus at 35.3 million ounces, compared with 2.4 million ounces recorded for calendar year 2017.

Total 2018 supply from mining and other sources is forecast to reach 998.4 million ounces, up slightly from the 995.2 millions ounces in 2017.

Total physical demand is projected at 963 million ounces compared with 992.8 million ounces in 2017.

The 2018 coin and bar demand is expected to be 124.8 million ounces compared with 2017's 142.1 million ounces.

The spot price of silver thus far in 2018 has averaged 15.89 per ounce compared with $17.05 in 2017. The silver prices for all of 2018 are expected to average to $15.73 per ounce.

Additionally, the survey concludes:

??Demand for jewelry and silverware is forecast to fall 0.6 percent in 2018 to 252.9 million ounces. “The drop is mainly a reflection of soft demand in India and China,” according to GFMS. “In the case of the former, the disappointing monsoon season did not result in the expected increase in jewelry purchases whereas for the latter a generally weakening economic climate is hampering further purchases. The decline in Thai jewelry fabrication has slowed this year with continued strong demand from the United States.”

??“For the use of silver in a wide range of industrial applications, accounting for approximately 60 percent of total silver demand in 2018, we foresee on balance a modest decline this year of 1.8 percent reaching 585.4 million ounces,” according to GFMS. “Demand for silver used in the photovoltaic sector contracted on the back of an increasingly more challenging global environment. This has been particularly driven by government interventions at the two largest economies of the world. Despite imposed import restrictions by President Trump it is particularly changes in China that are setting the tone for slower growth.”

??The Chinese government introduced legislation to reduce solar subsidies in order to slow growth after new installations significantly exceeded its 13th five-year plan budget, according to GFMS. “Although the decline has slowed, silver used in the photography sector continued to contract by 3.4 percent reaching 39.5 million ounces. Demand for electronic and electrical applications, however, continued to drive robust growth, potentially expanding by 2.8 percent to 249.6 million ounces this year. A general rise in electrical equipment has risen the need for silver coated circuity, wires and switches from a variety of end-uses. Following the increased electrification of powertrains, the automotive sector is taking a lead in this development.”

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