Summa Silver Corp. (TSXV: SSVR, OTC: SSVRF, FRA: 48X)
Silver Lives Here
When thinking about silver, we often first associate it with its identity as a precious metal. Perhaps because of this, silver has remained in the shadow of gold. Its price movements have been relatively weak recently, with the gold-to-silver ratio hitting a one-year high this week. However, according to recent research, silver’s other identity—as an industrial metal—will become a key driver for future price increases.
Among precious metals, silver stands out due to its “smart” and “green” attributes.
Ankita Amajuri, Assistant Economist at Capital Economics, predicts that silver prices will rise to $35 per ounce in 2025 and further increase to $38 per ounce by the end of 2026. The rationale is that silver’s crucial role in key industries will drive its prices higher over the next two years.
Industrial demand for silver accounts for approximately 50% of global silver usage, with significant contributions from sectors like electronics, photovoltaics, healthcare, and chemicals. While slower economic growth in China has strained global demand for some industrial metals, silver is a critical component in fast-growing fields like 5G technology, solar power, batteries, electric vehicles (EVs), and biotechnology. As fields like renewable energy and advanced manufacturing develop, this share is expected to gradually increase.
Additionally, silver’s role in semiconductor production is critical. Semiconductors are key components driving the development of artificial intelligence (AI). In her report, Amajuri notes that while AI is currently used mainly in the IT industry, its expansion into other sectors in the future will drive robust growth in semiconductor chip demand—and consequently in silver demand.
The largest sector driving silver demand growth is solar power. According to estimates by the International Energy Agency (IEA), global PV capacity from 2024 to 2030 will triple the total installed in the past six years. More importantly, newer PV technologies consume 20%–120% more silver compared to traditional ones. By 2024, solar-related silver demand is estimated to surpass 7,000 tons.
Meanwhile, the share of silver demand from the solar sector continues to rise. This share has increased from 6% of overall silver demand in 2015 to more than 19% in 2024, and it is expected to exceed 30% by 2030.
In a separate report, analysts at Wood Mackenzie highlighted that China continues to lead the way in solar power development and production. Research indicates that in 2024, Chinese companies set a record by installing 24 gigawatts (GW) of new overseas clean energy capacity in Belt and Road countries, with solar and hydropower accounting for over two-thirds of this new capacity. Chinese companies are prioritizing green technologies in overseas markets, with such projects now making up over two-thirds of their project pipeline.
While demand is a key factor in the silver market, supply is equally critical. Amajuri points out that silver supply may not keep pace with growing demand over the next two years.
“Mine production has remained stagnant since the pandemic. While recycled silver met 15% of total demand in 2024, the complexity and high costs of recycling will limit its growth—at least at current silver prices. Additionally, most solar panels and semiconductors in use today won’t be decommissioned for another few decades,” she said.
“Admittedly, the supply and demand dynamics in the silver market are already pushing prices higher. The silver market has been in deficit since 2019, and prices have doubled during this period,” Amajuri concluded.
