"The increase will be driven by record silver industrial fabrication, which is forecast to improve by 5%, as silver's use expands in both traditional and critical green technologies," the institute said. 

"Physical silver investment demand (consisting of silver bar and bullion coin purchases) is projected to jump 13% in 2022, achieving a seven-year high. Silver's use in jewellery and silverware is also expected to strengthen in 2022 by 11% and 21%, respectively." 

The institute said that macroeconomic and geopolitical conditions would generally support precious-metals prices for the first six months of 2022, while the pace of US policy rate hikes makes the price outlook more challenging. 

Industrial offtake of silver - which accounted for more than half of total demand - was tipped by the group to set a record high in 2022 as the recovering global economy is expected to mitigate near-term headwinds from supply chain bottlenecks and COVID-19 issues. 

The worldwide chip shortage, which has been stymying the rollout of electric vehicles, was expected to ease gradually throughout this year, which should see a rise in silver demand for these and other electrical and electronic applications expand.

India was tipped to lead a 21% rise of silverware fabrication and 11% increase in jewellery demand. In the US, demand was expected to slow, following a "significant rebound" in 2021, The Silver Institute said. 

On the supply side, the institute sees global volumes rising by 7% year-on-year to 1.09 billion ounces this year. 

"The main contributor is silver mine production, which is forecast to grow 7% to a six-year high this year. This will be driven by higher output from primary silver mines, particularly from several large existing operations and supported by large new projects coming online," the institute said. 

Silver recycling should see a "modest" 3% year-on-year lift, while all other areas were expected to record lower volumes as distress selling weighs on jewellery and silverware scrap, it said. 

There was a small deficit in supply last year, which is expected to rise to 20Moz this year.

"Overall, the 2022 annual average silver price (basis the LBMA silver price) is forecast to be US$24.80, 1% lower than the 2021's average price of $25.13," the group said. 

"Even so, it will still represent a historically high annual average," it added.