Last year, fabrication demand
by 1.5 percent to 876.6 million ounces (m/oz). Declines were seen in all fabrication categories except coins and metals, which GFMS prefers to treat as investments.
Though categories such as photography and silverware have been declining for some time, industrial demand has been growing over the past decade, with the exception of 2009, which was a recession year. However, in 2011, all global markets witnessed declining industrial demand for silver except China, resulting in a drop of 2.5 percent, or 486.5 m/oz, in industrial offtake.
on the day of the survey's release, Philip Klapwijk, Head of Global Analytics for GFMS, explained that this drop was due to a fairly significant dip in the rate of OECD industrial production that fed through to reduced demand for raw materials.
In the first half of the year, there was actually strong growth in industrial demand for silver, but the declines, particularly in the fourth quarter, were severe enough to bring down the overall demand total for the year.
Mine production increased, growing 1.4 percent to a record 761.6 m/oz.
According to Klapwijk, though there were notable declines in production from Australia, the US, and Peru, there was significant production growth from Mexico, China, and Poland to compensate.