The global silver deficit is projected to increase by 17% in 2024, reaching 215.3 million ounces, as reported by the Silver Institute. This rise is fueled by a 2% growth in demand driven by robust industrial consumption, coupled with a 1% decline in total supply.
Despite deficits in the previous years, 2023 marked the second-highest year for annual silver demand on record. The persistent imbalance between supply and demand has led to a cumulative deficit of 474 million ounces over the past three years, highlighting ongoing challenges in the silver market.
Philip Newman, managing director at Metals Focus, emphasized that the deficit in the silver market supports its price despite a decrease last year. With visible silver inventories and significant metal stocks held by individuals and investors, the market remains shielded from immediate pressure.
The surge in solar installations and electric vehicle production has led to increased silver demand in these sectors, with the solar industry showing remarkable growth. However, meeting demand amidst supply challenges remains a concern, especially with the limited availability of primary mines and the potential depletion of global silver reserves by 2050.
As silver prices continue to rise, experts anticipate a shift towards alternative technologies using cheaper metals. Strategic planning is crucial to address supply challenges and sustain the silver market’s pivotal role in the transition to renewables and achieving net zero emissions.
The global silver market is navigating a complex landscape, influenced by industrial consumption, investor sentiment, and the transition towards sustainable energy sources. The road ahead will require innovative solutions to ensure a sustainable and stable silver market amidst rising demand and evolving technological trends.
