As the price of silver fell to a new low in November, India imported a record amount of the shiny metal. Demand for the physical metal was so strong, India nearly imported the same amount of silver in November than it did for the entire year in 2009.
Koos Jansen at BullionStar.com, published a great article, India Silver Imported 6,789t YTD, showing just how much silver was imported into the country in October and November.
I took some of his recent data from that article and updated my graphs. India imported a staggering 1,254 metric tons (mt) of silver in November and 1,243 mt in October for a total of 2,467 mt. If we break down India’s silver imports on a quarterly basis, we can see just how big these numbers really are:
In just two months (Oct & Nov), India imported twice as much as in Jan-Apr, and a great deal more than the following two quarters. If India imports at least 700 mt in December, the fourth quarter will be nearly double the amount imported during the second highest quarter, Apr-Jun.
As Koos stated in his article, India has already imported a record 6,789 mt of silver Jan-Nov. If India does import 700 mt of silver in December, the total would reach 7,400+mt for the year. This would be an increase of 27% compared to the previous record of 5,819 mt set in 2013.
As I mentioned at the top of the article, India imported 1,254 mt of silver just in November, compared to a total of 1,274 mt for 2009. Furthermore, Indian silver imports in October and November (2,497 mt) were higher than the total in 2012 at 1,922 mt. These are big figures indeed.
Just to give the reader a sense of how much silver India imported, lets compare it to total global silver mine supply:
2014 Estimated Global Silver Mine Supply = 825 Million oz
2014 Estimated Indian Silver Imports = 234 Million oz
India’s estimated 2014 silver imports at 7,400 mt equals 234 million oz (Moz) or 28% of total world mine supply of 825 Moz in 2014 (GFMS estimate with my adjustment).
As I stated in my article, BREAKING: Significant Drawdown of U.K. Silver Inventories Due To Record Silver Demand:
According to GFMS Silver Interim Report released on Nov 18th:
Meanwhile demand for silver bars and coins has soared in recent weeks as bargain hunting retail investors returned to the silver market after a disappointing first half of the year. Nowhere is this more evident than in India where imports of silver are up by 14% year-on-year for the January to October period and set for an annual record. With imports in the first ten months totalling a massive 169 Moz many vaults in the UK, traditionally the largest supplier to India, have seen significant drawdowns, leading to more supply flowing from China and Russia.
If London was already suffering a drawdown of silver inventories in October from huge Indian demand, how bad is the situation after another 1,254 mt was imported by India in November? How tight is the wholesale silver market now?
The world has consumed its huge stockpile of above ground silver for the past 3-4 decades. and I believe will soon be faced with a serious problem. And that is, where will the market acquire silver stocks to offset annual deficits and increased demand in the future?
Currently, investors are swimming in worthless paper assets up to their eyeballs. This is very unfortunate as when the time comes to move into physical assets such as gold and silver to protect their wealth, there will be very little to go around… EXCEPT at much HIGHER PRICES.
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