Silver demand continues to outstrip supply, marking the third consecutive year of deficit according to data from the Silver Institute. Despite a 1% drop in silver mine output to 830.5 million ounces in the previous year, total silver demand also decreased by approximately 7% to 1.2 billion ounces. This resulted in a structural deficit of 184.3 million ounces in the silver market.

The 2023 industrial silver demand hit a record high of 654.4 million ounces, driven by advancements in green economy applications. The Silver Institute highlighted the significant increase in global electrical & electronics demand by 20% due to higher photovoltaic capacity additions and faster adoption of new-generation solar cells. This spike in demand was also attributed to other green-related applications such as power grid construction and automotive electrification.

Chinese industrial silver demand surged by an impressive 44% to 261.2 million ounces, primarily due to the growth in green applications. The ongoing green energy revolution is expected to further boost industrial silver demand in the coming years, with silver playing a crucial role in the production of solar panels due to its outstanding electrical conductivity.

While falling investment demand contributed to the overall drop in silver offtake last year, the photovoltaic industry remains resilient due to government support worldwide. Despite recession worries, investment in solar power and other green energy technologies is expected to remain steady, driving industrial silver demand higher.

Looking ahead to 2024, the Silver Institute projects a healthy 2% growth in total silver demand, with industrial fabrication anticipated to reach an all-time high. The market is forecasted to experience a second-largest deficit in more than 20 years, totaling around 215 million ounces if trends continue as expected.

In conclusion, the silver market is facing ongoing challenges with demand outpacing supply for the third consecutive year. Industrial applications, especially in the green energy sector, are driving significant growth in silver demand, highlighting the metal’s essential role in shaping the future of sustainable technologies.