Industrial demand for silver, fueled by record photovoltaic growth, rose in 2017 for the first time since 2013. A stronger global economy led to healthy demand from the semi-conductor market, resulting in greater silver offtake in electrical and electronics applications as well as brazing alloys and solders. The jewelry and silverware sectors also experienced noteworthy gains in 2017. On the supply side, global mine supply fell for the second consecutive year, following an uninterrupted streak of 13 annual increases prior to 2016. Silver scrap supply, which has been in retreat since 2012, again registered a loss. These factors led to a tightening of the supply/demand balance, contributing to a physical deficit of 26 million ounces (Moz) in 2017, the fifth consecutive annual deficit.
These findings, along with other key segments of the silver market, are discussed in World Silver Survey 2018, released today by the Silver Institute and produced on its behalf by the GFMS Team at Thomson Reuters (GFMS).
Silver Industrial Demand
Global silver industrial fabrication demand returned to growth in 2017, increasing 4 percent to 599.0 Moz. This was the first rise in silver industrial fabrication since 2013. This growth was bolstered by another year of impressive photovoltaic demand, rising 19 percent in 2017, the result of a 24 percent increase in global solar panel installations. Brazing alloy and solder silver fabrication recorded a 4 percent annual rise to 57.5 Moz, boosted mainly by solid growth from China and Japan.
The surge in electronics, most notably in semi-conductor fabrication demand, led to the electrical and electronics segments delivering the first annual increase in offtake in this category since 2010, with 242.9 Moz consumed last year. Silver demand for the production of ethylene oxide retreated by a third from 2016 volumes to 6.9 Moz, mostly due to a decline in new installations. GFMS estimates that silver’s use in photography, which fell by 3 percent last year to 44.0 Moz, appears to have stabilized, with renewed interest in various photographic applications utilizing silver, only falling marginally over the last few years.
Silver Jewelry and Silverware Demand
Silver jewelry demand moved 2 percent higher in 2017 to 209.1 Moz. India was chiefly responsible for the gain, rising 7 percent over 2016 volumes. Demand also picked up strongly in North America, with the United States posting a 12 percent rise to an all-time high. Global demand for silverware jumped by 12 percent last year to 58.4 Moz, led by a strong recovery in demand from India, which experienced a 19 percent increase. North America also posted solid gains, rising 5 percent to 1.6 Moz.
Global silver mine production fell by 4.1 percent in 2017, experiencing its second consecutive annual decline to record 852.1 Moz. The decline was mainly credited to a series of supply disruptions across the Americas. Another leading factor in the drop was due to the primary silver and gold sectors, where production fell by a combined 29.4 Moz. Of the key producing countries, Peru and China registered subtle dips, followed by more acute losses in Australia and Argentina. Offsetting those losses was higher output from Mexico, which was once again the world’s top silver producing country, trailed by Peru, China, Russia and Chile.
Supply from primary silver mines decreased by 9 percent in 2017 to contribute 28 percent of total mine supply. The lead/zinc sector contributed 36 percent of by-product output, followed by copper at 23 percent and gold at 12 percent.
Silver scrap supply fell to 138.1 Moz, marking its sixth successive yearly decline. Lower scrap flows from Asia, mainly China, driven by a lack of incentives from both suppliers and consumers to recycle their valuables, is chiefly responsible for the fall. Supply from the western world was marginally higher, driven by increased volumes from the United States and Europe.
Above-ground stocks rose 3 percent last year. Of the four exchanges that report silver stocks, three saw total silver inventory growth of 2 percent in 2017; COMEX in the United States, the SHFE and the SGE in China. In contrast, silver inventories held at TOCOM declined dramatically by 98 percent, driven by strong industrial demand in Japan.
GFMS reports that government sales of silver were once again absent from the silver market in 2017. Lastly, in the supply category, the delta-adjusted hedge book inched higher by 1.4 Moz, ending last year at 21.5 Moz.
Silver Price and Investment
The annual average silver price fell by a slight 0.5 percent to $17.05/oz last year, with prices trading in a $15.22/oz – $18.56/oz range. That said, last year’s average silver price represents an 8.7 percent increase over the average posted just two years ago of $15.68/oz.
Identifiable investment, which consists of net-physical bar investment, coins and medals purchased, and net-changes to exchange traded product (ETP) holdings, reached 153.5 Moz in 2017 a 40 percent decline from the previous year. This was primarily the result of a 35 percent decline in coin and medal fabrication, led by lower demand in the United States, Canada and China. Physical bar demand slipped by 16 percent last year.
In contrast, total global ETP holdings increased by 2.4 Moz to finish 2017 at 669.8 Moz. In value terms, total ETP holdings increased 4 percent to $11.3 billion, as the silver price advanced throughout the year.
Sunak to use budget to expand apprenticeships in England
LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.
Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.
The scheme will extended by six months until the end of September, the finance ministry said.
Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.
Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.
Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.
“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.
(Reporting by Andy Bruce, editing by David Milliken)
UK seeks G7 consensus on digital competition after Facebook blackout
LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.
Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.
“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.
“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”
Dowden said recent events had strengthened his view that digital markets did not currently function properly.
He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.
“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.
Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.
“Nick strongly agreed with the Secretary of Stateâ€™s (Dowden’s) assertion that the governmentâ€™s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.
Britain will host a meeting of G7 leaders in June.
It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.
The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.
Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.
(Reporting by William James; Editing by Gareth Jones and John Stonestreet)
Britain to offer fast-track visas to bolster fintechs after Brexit
By Huw Jones
LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.
Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.
“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.
Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.
Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.
The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.
It also recommends more flexible listing rules for fintechs to catch up with New York.
“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.
“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)
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