While silver has long been valued as a precious metal, its high reflectivity and very good electrical conductivity have made it indispensable in photovoltaics, as well as electronics and other industrial applications. All told, the Silver Institute expects industrial demand to reach 632 million ounces in 2023 against total demand of 1.14 billion ounces.
The rest of that demand will come from the jewelry and silverware industries, as well as photography and physical investment. With supply set to reach just over 1 billion ounces, a 141 million ounce deficit is anticipated for 2023. The 2023 silver deficit will be the third in a row, and the Silver Institute doesn’t expect relief any time soon, even with new projects in the works.
Those include Aya Gold & Silver’s Zgounder mine expansion, which will add about 3 million ounces in 2024 before seeing an increase to 6 million ounces in 2025. Meanwhile, Endeavour is in the process of building its Terronera mine-although it should be complete by the end of 2024, its annual production of 4 million ounces of silver won’t be available until 2025.
Weighing in on supply, Peter Krauth of Silver Stock Investor told INN he doesn’t see much growth in silver production through 2024 and beyond. “Recent research from Bank of America based on guidance from the largest silver producers suggests that mined silver supply peaked in 2016 and will not match that level again anytime soon,” he said.
The Silver Institute‘s Michael DiRienzo told INN the current silver price isn’t incentivizing Greenfield exploration. “Much of the development in exploration is seen in brownfield exploration to increase reserves and extend mine life,” he said. DiRienzo also noted that a change in mining laws in Mexico could further challenge activities. Mining concession length has been reduced from 50 to 30 years, and concessions can be canceled if no work is completed within two years.