Silver Demand Outpaces Supply

03 Jul

Silver Demand Outpaces Supply

Powerful bullish fundamentals taking shape!

“Changes to solar panel technology are accelerating demand for silver,” reports Bloomberg News.  The result is an increasing deficit in silver while the outlook for additional new mine production is thin.

The Silver Institute, an industry association, reports that as recently as 2014 solar technology accounted for only about 5 percent of annual demand.  This year, solar is projected to amount to 14 percent of silver demand.

The Silver Institute projects total silver demand to increase by 4 percent this year, while production is expected to grow by an anemic 2 percent.

Bloomberg explains this subpar production outlook:

The trouble for silver buyers is that cranking up supply is far from easy, given the rarity of primary mines. About 80% of the supply of the metal comes from lead, zinc, copper, and gold projects, with silver as a by-product.

And in an environment where miners are already reluctant to commit to large new projects, lower margins in silver compared with other precious and industrial metals mean positive price signals aren’t enough to crank up output. Even newly approved projects could be a decade away from production.

The result is a strain on supply so significant that a study from the University of New South Wales forecasts the solar sector could exhaust between 85–98% of global silver reserves by 2050.

Speak with your Republic Monetary Exchange precious metals specialist about what this supply/demand mismatch can mean for future silver prices.