- Silver Prices Surge and Retreat, Volatility Exceeds 10%
The silver market has recently experienced significant volatility. Spot silver prices briefly surpassed $83 per ounce, rising nearly 6%, before quickly falling back to around $75, with intraday swings exceeding 10%. Since the beginning of the year, silver has rallied over 160%, significantly outperforming gold and drawing widespread market attention.
- Industrial Demand and Supply Pressures Drive Market Volatility
Analysis indicates that the sharp fluctuations in the silver market are primarily driven by growing industrial demand and structural supply pressures. On the demand side, rapid growth in the new energy sector, particularly photovoltaics, has become a major driver of silver consumption. According to Citigroup analysts, silver used in solar panel manufacturing now accounts for 30% of global annual production, and this share continues to rise. However, the supply side faces long-term challenges. Global deposits of “primary silver” are nearly depleted, with over 80% of silver production coming as a byproduct or co-product of lead, zinc, and copper mining. This supply structure makes silver highly vulnerable to fluctuations in other base metal markets, creating a structural tension between “rigid demand” and “inelastic supply.”
- Long-Term Prospects and Potential Challenges for Silver
Market sentiment has further intensified price volatility amid a speculative atmosphere in precious metals. Financial author John Rubino believes that the surge in silver prices may signal deeper shifts in the monetary system, and he predicts that silver could reach $200 per ounce in the future. Rubino also notes that tech companies may stockpile silver reserves or even acquire silver mines to secure critical raw material supplies, which could profoundly impact market dynamics.
- How the New Energy and Photovoltaic Industries Are Addressing Silver Cost Pressures
Amid persistently rising silver prices, the photovoltaic industry faces significant cost pressures. Currently, silver paste accounts for 17% of the total cost of photovoltaic modules, making it a key factor affecting the industry’s profitability. To tackle these challenges, photovoltaic companies are responding through both technological innovation and financial strategies. On the technological front, the industry is accelerating the development of “low-silver” and “silver-free” technologies, such as fine-line printing, silver-coated copper, and copper electroplating, to reduce silver usage. Financially, companies are using futures for hedging or offering silver leasing services to alleviate short-term funding and inventory pressures. These measures help the industry gradually build a sustainable development model with controllable costs and stable supply.
Looking ahead, institutions generally believe that silver’s long-term fundamentals remain strong, but caution is warranted against short-term pullback risks due to high volatility. Investors should closely monitor factors such as the Federal Reserve’s monetary policy, global geopolitical developments, and the pace of photovoltaic technology advancements. Against the backdrop of the energy transition and global supply chain restructuring, the silver market stands at a historic juncture driven by both its “industrial attributes” and “financial attributes.” Its price fluctuations not only reflect changes in commodity supply and demand but also highlight the resource challenges and innovative responses during the energy transition. For market participants, while seizing long-term trends, strengthening risk management, and adopting diversified hedging strategies will be prudent approaches to navigating high market volatility.
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