Experts forecast record high prices and robust global demand for silver
While silver is being overshadowed by the current price surge for gold, it is also being tipped as a commodity to follow.
Global experts are predicting silver may hit a high of US$48 this year, up from its current US$24.53, as its market also reacts to geopolitical issues and a year featuring a number of significant elections.
It has been forecast that global silver demand will reach 1.2 billion ounces in 2024, the second-highest level recorded.
The Silver Institute says demand is being pushed higher by the continued strength of industrial end-uses and a recovery in jewellery and silverware demand.
Silver industrial fabrication has been tipped to achieve a 4% rise in 2024 to a record 690Moz, building on the all-time highs achieved last year.
Key growth drivers
In a continuation of recent trends, the photovoltaics (PV) and automotive industries will remain key drivers of growth this year.
Global PV installations significantly exceeded initial market expectations in 2023, with new capacity additions forecast to reach another record high this year.
Silver may also benefit from the technological breakthrough that has brought new, higher-efficiency N-type solar cells (with higher silver loadings) into mass production.
In the automotive industry, greater use of electronic components and investment in battery charging infrastructure will continue to support silver offtake.
Jewellery demand is expected to rise 6% this year, with India providing the bulk of the gain.
Supply also on the rise
Total global silver supply is also forecast to have a strong 2024, rising by 3% to an eight-year high of 1.02Boz, thanks in large part to a recovery in mine output.
Silver mine production in 2024 is projected to rise 4% to 843Moz, its highest level since 2018.
The institute sees growth being supported by new production from Newmont’s Peñasquito gold mine in Mexico, the commissioning of Polymetal’s Prognoz silver mine in Russia, the start-up of Gold Fields’ Salares Norte gold mine in Chile and the continued ramp-up of operations at Coeur’s Rochester expansion project in the US.
Recycling numbers slide
Silver recycling, on the other hand, is expected to edge lower, with volumes likely to drop by 3% to a three-year low.
The institute noted that lower jewellery and silverware scrap supply will account for most of this year’s losses.
Photographic scrap is also expected to weaken due to structural factors, leaving industrial recycling the only area anticipated to record modestly higher volumes.
The silver market is forecast to remain in a deficit (total supply less than demand) in 2024, marking the fourth consecutive year of a structural market shortage.
Although this year’s deficit is expected to ease by 9% from 194Moz in 2023 to 176Moz, the institute says this remains exceptionally high by historical standards.