Silver recycling or scrap silver showed a decline globally in recent years, according to the Sprott Physical Silver Trust fund.
First of all, scrap silver refers to silver that has been recovered from manufactured products, melted, refined, and molded into bullion for later resale in the silver market.
The silver recycling supply has decreased from 232.61 million ounces in 2011 to 169 million ounces in 2019, as a low silver price discourages scrap sales.
Historically, central banks, other government agencies, and multilateral institutions have held strategic reserve assets of gold and, to a lesser extent, silver.
According to Sprott Physical Silver Trust, sources of silver supply include both mining production and recycling or mobilization of existing above-ground stocks.
Most of the silver supplied to the market annually comes from mining production.
Then the second largest source of annual silver supply comes from scrap silver, which is silver that has been recovered from jewelry, photographs, and other manufactured products and converted back into marketable silver.
Mining production includes silver produced from both primary and secondary deposits.
Secondary deposits refer to mining operations where silver is recovered as a metallic by-product of other mining activities.
For example, during the years 2011 to 2018, mining production covered approximately 83% of total demand.
The shortfall in total supply has been covered with supplies from existing above-ground stocks, which come mainly from recycling silver.
Silver differs from gold in that more than two-thirds of the silver mine supply is a by-product of other metal mining (lead, zinc, copper or gold) with primary silver production comprising 30% of mine production world.
Therefore, it can be said that a significant part of the annual supply of silver is relatively independent of the price of silver