abrdn Silver ETF Trust

This section provides a brief introduction to the silver industry by looking at some of the key participants, detailing the primary sources of demand and supply and outlining the role of the “official” sector (i.e., central banks) in the market.

In this annual report, the term “ounces” refers to troy ounces.

Market Participants

The participants in the world silver market may be classified in the following sectors: the mining and producer sector, the banking sector, the official sector, the investment sector, and the manufacturing sector. A brief description of each follows.

Mining and Producer Sector

This group includes mining companies that specialize in silver and silver production, mining companies that produce silver as a by-product of other production (such as a copper or gold producer), scrap merchants and recyclers. According to The Silver Institute’s World Silver Survey 2025, the top 20 producing countries are set forth in the table below. As the World Silver Survey 2025 was published in April 2025, information for 2025 is not available as of the date of this report.

Source: The Silver Institute - World Silver Survey 2025 (Metals Focus)

Banking Sector

Bullion banks provide a variety of services to the silver market and its participants, thereby facilitating interactions between other parties. Services provided by the bullion banking community include traditional banking products as well as mine financing, physical silver purchases and sales, hedging and risk management, inventory management for industrial users and consumers and silver leasing.

The Official Sector

There are no official statistics published by the International Monetary Fund, Bank of International Settlements, or national banks on silver holdings by national governments. The main reason for this is that silver is generally not recognized as a reserve asset. Consequently, there are very limited silver stocks held by governments. According to The Silver Institute World Silver Survey 2025, the identifiable silver bullion inventories are as set forth in the table below. As the World Silver Survey 2025 was published in April 2025, information for 2025 is not available as of the date of this report.

*Year-end; Source: The Silver Institute - World Silver Survey 2025 (Metals Focus, LBMA, CME, SGE, SHFE, MCX & OSE)

The Investment Sector

This sector includes the investment and trading activities of both professional and private investors and speculators. These participants range from large hedge and mutual funds to day-traders on futures exchanges, and retail-level coin collectors.

The Manufacturing Sector

The fabrication and manufacturing sector represents all the commercial and industrial users of silver. Industrial applications comprise the largest use of silver. The jewelry and silverware sector is the second largest, followed by the photographic industry (although the latter has been declining over a number of years as a result of the spread of digital photography).

World Silver Supply and Demand 2016-2025

The following table sets forth a summary of the world silver supply and demand for the period from 2016 to 2025 and is based on information reported by the World Silver Survey 2025, published by The Silver Institute. As the World Silver Survey 2025 was published in April 2025, the table below includes forecasted information for 2024 as of date of publication. As of the date of this report, final figures (i.e., non-forecasted) for 2025 are not yet available.

*Forecasted

Source: The Silver Institute - World Silver Survey 2025 (Metals Focus)

The following are some of the main characteristics of the silver market illustrated by the table.

The balance between silver supply and demand is a fundamental driver of its price. Silver has some of the same drivers of investment demand as gold, in that it can be used as a hedge against inflation or currency devaluation, or for portfolio diversification as an alternative currency. As such, silver investment demand may be influenced by interest rates. Silver, unlike gold, has a significant demand for industrial applications, such as electronics, solar panels, and medical equipment, due to its unique properties, such a high thermal and electrical conductivity.

New mine production accounts for approximately 82.3% of total silver supply. Recycled silver accounts for around 17.3% of total supply.

Industrial applications and jewelry demand accounted for over 58% of total demand in 2024. Photography has been taking a lower share of overall silver demand, falling from 3.5% in 2016 to 2.2% in 2024, while photovoltaic demand has risen in recent years accounting for 17% in 2024. Net physical investment (i.e. in coins and bars) fell for a second consecutive year, accounting for 16% of demand in 2024, down from a high of 26.3% in 2022.

The price of silver is volatile and fluctuations are expected to have a direct impact on the value of the Shares. However, movements in the price of silver in the past are not a reliable indicator of future movements. Movements may be influenced by various factors, including announcements from central banks regarding a country’s reserve silver holdings, agreements among central banks, political uncertainties around the world, and economic concerns. The following chart illustrates the movements in the price of an ounce of silver in dollars from December 31, 2015 to December 31, 2025 and is based on information provided by Bloomberg:

Source: Bloomberg, Aberdeen. Chart data from 12/31/2015 to 12/31/2025. Spot Silver Price = SLVRLND Index.

The following is a discussion of the movements in the price of silver illustrated by the table:

The rise in the value of the U.S. Dollar, sluggish industrial growth and a tame inflation environment (which led some investors to revise their expectations of the effects of monetary expansion) were some of the drivers behind the movement fall in silver prices from 2011 to 2019. Silver reversed course in 2020, after COVID stimulus measures were announced, helping prices rise 46.75%, closing the year at $26.49 per ounce. In 2021, silver took a slight step back after its performance in 2020, as it returned -13% for the year, as silver took a backseat to riskier asset classes.

2022 was a volatile year for silver as well as other metals in the wake of Russia’s invasion of Ukraine. The invasion caused sanctions and geopolitical unrest which weighed on the economic outlook and affected the interest rate outlook. Ultimately silver finished the year at $23.95 per ounce, with a yearly performance of +2.77%.

The strong demand and reduced supply trends that were prevalent towards the end of 2022 were expected to continue in 2023. However economic and geopolitical factors including a US banking crisis drove interest rate and industrial demand volatility for the year. The price of silver ultimately ended the year at $23.79 per ounce on December 29, 2023, down -0.65% for the year, as market participants were disappointed by the lack of economic stimulus in China.

In 2024, the spot price of silver began the year on a downward trend as the economic stimulus out of China at the end of 2023 disappointed investors and had little immediate effect on the economy. The potential for U.S. interest rate cuts inspired some increased attention by investors over the summer months. The U.S. Federal Reserve’s interest rate cut provided an additional tailwind that would send the price as high as $32.48 per ounce on September 26, 2024. Headwinds grew as the US election resulted in an increased potential of tariffs that are large enough to slow Chinese economic growth. Overall, the year was marked by alternating optimism and pessimism on China’s economic activity and levels of stimulus. Additional volatility came from a disappointing energy transition in the U.S. despite an outperforming energy transition in China where silver’s use in solar panel manufacturing is a key silver demand driver.

In 2025, as the threat of extreme tariffs and sanctions came into focus, the spot price of silver finally responded to the deficit that had existed over the prior six years. That market deficit has mostly been driven by industrial demand, however investor interest in Exchange-Traded Products (ETPs) also accounted for a sizable portion of this year’s rally. In April, the US administration added silver to the draft Section 232 notice, including it as a critical mineral and fueling speculation of US tariffs, which resulted in large volumes of silver being moved from London vaults to U.S. exchange vaults to avoid any potential tariffs, with the result of tightening silver availability in London, the highest volume market. The spot price rose to $54.10 per ounce on October 17, 2025. Following a 14% selloff in October, the spot price found ongoing support from industrial demand in India and China, as the jewelry/investing sector substituted silver purchases for gold, industrial demand increased, and the Indian government approved holding both gold and silver ETPs in local pension plans. While the decision to impose tariffs on critical minerals was ultimately delayed into 2026, market speculation and investor interest in ETPs more than doubled the market deficit with large purchases throughout the year. These factors combined to support a year-end rally that drove the spot price of silver to $71.99 per ounce on December 31, 2025, an increase of 149% from the prior year end.