Mumbai: Demand for silver jewelry, coin and bar and photo-voltaic sectors set a record for the market, as silver demand reach 1.17 billion ounces last year, according to a report by The Silver Institute.

The World Silver Survey 2016 showed that overall silver supply to the market was lower, due to continued weakness in silver scrap sales. Silver fabrication increased for third consecutive year to 226.5 million ounces. Demand in both India and Thailand rose 16 percent, while North America posted a 5-percent annual increase. These gains were partially offset by weakening jewelry demand in China.

Silver coin and bar investment rose 24 percent to 292.3 million ounces, the highest annual demand since 2013. Coin and bar demand accounted for 25 percent of total physical demand in 2015, the highest market share on record and up from just 5 percent a decade earlier.

Silver was not immune from the challenging conditions for all commodities, a situation exacerbated by continued Chinese economic slowdown and a stronger US dollar. As a result, the annual average silver price fell to $15.68/oz in 2015. This low price, however, helped boost physical demand as investors were drawn to the commodity by low prices, and in expectation of future price appreciation.

Globally, silver mine production slowed to 2 percent, although in volume terms it reached a record 886.7 million ounces. Peru, Argentina, India and Russia strengthened their output, while Canada, Australia and China lowered production, the latter by 3 percent. The Silver Institute estimated that the 2015 slowdown in mine production would continue in 2016.