The world’s richest man and Tesla CEO Elon Musk has expressed deep concern over the skyrocketing prices of silver. “This is not good. Silver is needed in many industrial processes,” he wrote bluntly on social media platform X. This tweet by Musk is not just a reaction, but a big warning for the times to come. In fact, silver is no longer just a means of jewelery or traditional investment, but it has become the backbone of modern industry and new-age technology.
The real reason for the rise in prices is not the cut in US interest rates, but the deep imbalance of demand and supply.
The expectation of cut in US interest rates or buying by investors is not the only main reason behind this huge surge in silver prices. The real reason for this is the deep imbalance between supply and demand in the market. There is a huge demand for silver from the industry, but its supply is not increasing at the same pace as its need is increasing. Silver is considered to be the best conductor of electricity, due to which it is very difficult to replace it with any other metal.
The ‘hunger’ for solar energy, electric vehicles and AI data centers broke all old demand records.
Silver is now being used on a large scale in modern technology. Especially its consumption in solar energy, electric vehicles (EVs) and electronics and AI data centers has increased rapidly. Statistics show that there has been a tremendous boom in the solar sector. Silver demand for solar panel manufacturing is expected to reach 243.7 million ounces in 2024, a massive 158% increase from 2020. It is estimated that by 2030, silver demand for solar power will increase by another 150 million ounces annually, which will put pressure on the market.
The crisis increases due to reduction in silver’s own mines, copper and gold are obtained as by-products during mining.
Increasing the supply of silver is not an easy task for mining companies. The biggest reason for this is that there are very few special mines of silver in the world. It is mostly extracted as a byproduct during mining of copper, lead, zinc and gold. This is the reason why it is not possible to increase production immediately when demand increases. If we look at the market data, a huge deficit of 501.4 million ounces was recorded in the silver market in 2024, which was only 19.4 million ounces in 2023. This difference shows how deep the crisis is.
Troubled by expensive silver, companies are looking for an alternative to copper, but there is a fear of falling quality and efficiency.
Troubled by rising prices, solar manufacturers and other companies are now trying to reduce the use of silver or replace it with copper. In the industry this is called ‘Thrifting’. According to reports, there may be a slight decline in the use of silver in solar modules this year. However, experts warn that it is not easy to completely remove or reduce silver. Doing this can have a negative impact on the quality and efficiency of the product, which will prove harmful in the long run.
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