Silver has become an increasingly pivotal commodity in the modern industrial landscape, particularly as the world strives towards a more sustainable and technologically advanced future. The industrial utilization of silver has grown substantially over the past decade, with demand projected to rise further in the coming years. Consequently, silver prices surged in global markets, with spot silver on the LBMA platform recording a substantial 28 percent gain in 2024. Prices reached a twelve-year high of $34.87 per troy ounce in October before experiencing a decline. Despite the fall, prices continue to trade around $30 per troy ounce, near levels not seen in over a decade.

The growing industrial utilization of silver, particularly in green energy sectors, has emerged as the dominant force driving demand, which led the physical investment to be only the second major demand factor. The expansion of solar panel capacity, as part of the global transition to renewable energy, has significantly increased the industrial relevance of silver. The accelerated adoption of new[1]generation photovoltaic (PV) solar cells, combined with higher[1]than-expected additions to global solar capacity, has boosted silver’s demand in the electrical and electronics industries. Furthermore, advancements in green technologies, including power grid expansions and electrification of vehicles, have contributed to this surge in industrial consumption.

According to the Silver Institute, industrial demand for silver was forecast to rise by 7 percent year-over-year in 2024, surpassing 700 million ounces for the first time on record. This growth is driven by applications within the green economy, particularly the photovoltaic sector, as adoption of solar power gains momentum globally. Additionally, the automotive industry is expected to maintain robust silver demand, benefiting from increased vehicle sophistication, the electrification of powertrains, and expanded infrastructure investments like charging stations. While challenging macroeconomic conditions have tempered consumer electronics sales, the rapid adoption of artificial intelligence (AI) technologies has spurred a need for technological upgrades, replacements, and new infrastructure investments, further amplifying silver demand.

In the meantime, global mined silver production is projected to increase by 1 percent year-over-year to 837 Source: The Silver Institute, Geojit Research. *Estimate Figure Source: The Silver Institute, Geojit Research. *Estimate Figure million ounces in 2024. This growth will be driven by higher production levels in Mexico, Chile, and the United States, offsetting lower output from Peru, Argentina, and China. Mexico’s silver production is forecast to rise by 10 million ounces, or 5% year over year, to 209 million ounces in 2024, primarily driven by higher mill throughput and grade at Pan American Silver’s La Colorada operation, following upgrades to ventilation infrastructure. Additionally, production from Newmont’s Peñasquito mine is expected to recover, further boosting Mexico’s silver output.

In the first half of 2024, primary silver mines experienced a decrease in average All-in Sustaining Cost (AISC), attributed to moderating input costs and higher by[1]product revenue. This trend is expected to continue as high metal prices offset production costs and larger royalty payments, further lowering AISC. Silver recycling is projected to grow by 5 percent in 2024, reaching a 12-year high, driven by price[1]sensitive sectors, particularly western silverware scrap. Industrial recycling will also edge higher, driven by structural factors.

India’s silver imports to double in 2024

India is emerging as a major consumer of silver. Beyond its traditional affinity for jewelry, the nation’s demand for precious metal is also propelled by its ambitious green energy initiatives and rapid expansion of 5G network. The imports of silver in India grew this year due to the demand from photovoltaic solar panel manufacturers, electronics producers, and investors seeking higher returns than gold. India’s silver imports are expected to nearly double in 2024, with total volumes projected to reach 6,500– 7,000 tons, a sharp rise from 3,625 tons in 2023. This surge follows substantial growth in the first half of the year, with imports soaring to 4,554 tons compared to just 560 tons during the same period a year earlier. A key driver of this growth is the Indian government’s recent decision to slash import duties on silver from 15 percent to 6 percent during the July budget meeting. This move aims to curb smuggling and ensure a stable supply for domestic industries. This policy change, combined with industrial buyers’ rush to replenish depleted 2023 inventories, has further strengthened demand.