Fresnillo plc remained in the first position in 2020 among the largest producers of primary silver in the world.
To understand: primary silver is raw silver, usually bullion or grains, freshly recovered from mining operations.
In addition to having that leadership, Fresnillo plc is the largest gold producer in Mexico, based on 2020 production volumes.
Following Fresnillo plc, among the world’s leading primary silver producers followed, according to Silver Institute: Hecla Mining Company, Hochschild Mining plc, Coeur Mining, Inc. and Silver Corp Metals Inc.
Silver is an industrial and investment product.
For industry, silver is an essential component in many products – with limited alternatives available – due to its unique combination of characteristics.
These include strength, malleability, electrical and thermal conductivity, high light reflectance, and the ability to withstand extreme temperatures.
Like gold, silver also has significant appeal as an investment commodity, because it is considered a safe haven and a hedge against inflation in times of economic uncertainty.
More than anything, the demand for silver is driven by three markets:
- Industrial applications.
- Investment (coins and bars).
- Consumer (jewelry and silverware).
The world and silver
In 2020, industrial, investment and consumer demand represented 50.1, 20.8 and 25.4% of the total global silver demand, respectively, according to the interim review1 of the Silver Institute, referred by Fresnillo plc.
Demand for silver fell to a 10-year low in 2020, and its decline was 6% less than in 2019 due to lockdown restrictions that affected industrial demand, with highly disrupted supply chains, and because end-users adopted a increasingly cautious approach to inventory replenishment and factories faced labor supply problems.
The reduction in industry demand was mitigated to some extent by an increase in demand for silver as an investment, which reached a five-year high in 2020 due to increased price volatility and healthy price expectations.