Total silver fabrication demand, led by surging industrial demand, rose to its highest level in 2005 since 2001. Total silver fabrication rose by 3 percent in 2005, to 864.4 million ounces (Moz), its highest total since 2001. Industrial fabrication contributed the most to the increase, with its sharp 11 percent rise (41 Moz) to record levels of 409.3 Moz - growth that has taken its share of total fabrication to 47 percent from 37 percent ten years prior. Indian offtake in industrial fabrication rose an outstanding 58 percent last year, while Japan experienced a 15 percent increase in 2005. China posted an impressive 6 percent increase in industrial demand to reach 31.8 Moz. The United States topped 100 Moz. Electrical and electronics demand, with its 10 percent rise globally, accounted for much of the industrial category's growth.

Despite higher silver prices, jewelry and silverware fabrication posted a modest increase in 2005, to 249.6 Moz. Much of the growth occurred in China and India. Chinese silver jewelry and silverware demand rose by a stunning 20 percent in 2005, to 16.4 Moz. Indian fabrication for this category rose by 8.5 percent to 48.9 Moz in 2005 while North America experienced its fourth successive year of growth.

Photographic demand decreased by 9 percent or just over 16 Moz last year, to 164.8 Moz. The bulk of the decline came from a reduction in the output of color film. Photographic demand accounted for just 19 percent of fabrication demand in 2005.

Coins and medal fabrication demand fell by 4 percent in 2005. Despite higher fabrication in the U.S. and Germany, lower minting in a number of European countries, together with some weakness in China, resulted in the slip.

Strong growth in Mexico and Australia pushed global silver mine production to a record high in 2005, reaching 641.6 Moz, with Peru, Mexico, Australia, China and Chile the top five silver mining countries in 2005. Last year, silver generated at primary mines increased by 8 percent, to reach 188.2 Moz, representing 29 percent of global silver production.

Supply of silver from above-ground stocks rose marginally to 222.8 Moz in 2005. The rise was due to higher producer hedging, scrap supply and government sales. Total scrap supply is estimated to have provided the market with 187.3 Moz of silver in 2005, inching up only 3 percent from 2004, despite the much stronger silver price. Net government sales crept up to 68.0 Moz in 2005, a 1.5 Moz increase over 2004. The share of total supply from government sales stood at 7 percent in 2005. The marginal growth of government sales in 2005 was the result of sales from India, which announced in 2004 that it would commence sales from its government stocks in 2005. Sales from China and Russia continued in 2005, however, last year was the first year since 1999 when China did not account for the bulk in government sales.