Silver demand for PV production worldwide is forecast to grow to 105 million ounces this year, as overall demand hits an eight-year high. Prices for the precious metal could reach a seven-year high of $30.00 per ounce this year but, according to the Silver Institute, this level is still far away from any critical threshold that would make silver supply for the solar industry problematic.
The Silver Bean sculpture in Chicago.
Image:
Wilhelm Joys Andersen, flickr
Silver demand is expected to rise 11% this year, due to a strong increase in industrial and physical silver investments, according to industry body The Silver Institute.
“The outlook for silver demand is bright, with the global total forecast to achieve an eight-year high in 2021 of 1.025 billion ounces, thereby recovering all losses sustained in 2020,” the analyst said in a statement. “This reflects expected gains in the critical segments of industrial demand, physical investment, jewelry, and silverware fabrication.”
The Silver Institute revealed that the average annual silver price grew from $16.19 per ounce in 2019 to $20.52 per ounce last year, and that this year this price may grow by 46% to a seven-year high of $30.00 per ounce. “Given silver’s smaller market and the increased price volatility this can generate, we expect silver to comfortably outperform gold this year,” it further explained.
“Although significant, this growth in the average price is still far away from any critical threshold that would make silver supply for the solar industry problematic,” Michael DiRienzo, executive director at The Silver Institute, told pv magazine. “An average price of over $40, which would mean peak prices of around $45, would eventually become the critical limit to cross.”
As for the PV industry, it is forecast to buy 105 million ounces this year, which would represent significant growth, compared to around 88 million ounces in 2020 and approximately 93 million ounces in 2019, “Although silver loadings continue to drift lower, the sector will benefit from a growing number of countries that are installing new PV capacity,” the analyst stated.
In June of last year, the Silver Institute noted that the ability of PV producers to reduce silver content in solar cell production – a process referred to as ‘thrifting’ – has reduced since 2016 but they anticipated the average 111mg of the precious metal needed for each solar cell in 2019 would nevertheless fall to 80mg by 2030. With silver on prices on the rise, it is expected that the rate of thrifting will continue to reduce.
In a report published in June 2018, the analyst highlighted how the amount of silver needed by the PV industry could fall from 130 mg per cell in 2016 to approximately 65 mg by 2028. According to a recent study by the University of Kent, silver accounts for around 6.1% of total PV module production costs. BloombergNEF recently stated the metal accounts for about 4.7% of the cost of a panel.
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