Silver Scrap Recycling study revealed!

Recently, published Market Trend Report that revealed the study about Silver Scrap Recycling! Above-ground stocks of silver can be divided into two principal categories: Fabricated products and bullion (bars and coins). This section covers the supply of scrapped fabricated products, with supply from bullion stocks covered in the Report.

The above-ground stock of silver in fabricated products is enormous. From 1990-2023 alone, a gross 25,600 Moz of silver was transformed into fabricated products (excluding bars, coins, and medals). Basis World Silver Survey data for the previous 40 years, from 1950-89, another 13.448 billion ounces was used for industrial purposes from (excluding the Communist Bloc countries).

To this figure of 39 billion ounces could be added fabrication demand in the Communist Bloc countries prior to 1990 and global legacy stocks built up over the centuries prior to 1950, which in the latter case would mostly consist of silverware.

Yet, while in theory a good part of this apparently huge pool of metal could be available to the market, in practice the reality is very different. Firstly, a not insignificant part of the silver fabricated since the 1950s will have already been recycled.

Based on an analysis of the historical data, cumulative recycling over these 70-plus years has been the equivalent to a bit less than one-fifth of total fabrication excluding coins over the same period. Secondly, the bulk of the legacy silverware is to be found in religious objects that will not as a rule be recycled, no matter what the price of silver.

Thirdly, when it comes to a large share of industrial products, the silver contained generally is too small to warrant economical recycling and where this is not the case, recycling is driven more by product end-of-life and environmental considerations than any price factors.

The data on recycling and price bear-out the above observations that the level of recycling is related only to only to a limited extent to the level of or change in the silver price. (At 0.29 the correlation co-efficient for levels is positive but rather low, while the figure for changes in the two series between 1990 and 2022 is 0.52.).

Experience during the last major bull market for silver also demonstrates that even very rapidly rising and high silver prices have a relatively small impact on scrap supply. For example, at its peak in 2011 at 223 Moz and an average price of $35/oz that year, silver scrap was just 10% higher than it had been in 2008 when silver averaged $15/oz. Indeed, independently of the price, other factors have been at work in driving recycling volumes, such as the displacement of silver halide photography by digital technology (leading to a halving in the amount of scrap silver from this source since 2012) or the substantial growth in ethylene oxide capacity (80% between 2010 and 2022) and the related jump in the recycling of these silver-rich catalysts.

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