Global silver prices to remain high as demand continues to outpace supply: Metals Focus

Global silver prices are likely to trend higher this year and next, despite continued thrifting from the photovoltaic sector, analyst Philip Newman of metals research firm Metals Focus said June 9.

During a presentation at the International Precious Metals Institute 2025 Annual Conference in Scottsdale, Arizona, Newman noted that global demand had outpaced global supply for the last four years and looks to do so again in 2025.

Though global demand eased by a projected 3% last year, demand is still expected to outpace supply in 2025, he added.

Much of the demand comes from the photovoltaic sector, whose demand is expected to decline this year by 1% to 6,086 mt after rising by 3% in 2024 to 6,147 mt, he said.

"That may appear to be a little bit bearish, but from my point of view ... the biggest takeaway is that silver demand is holding basically at record high levels, even though it is not growing," Newman said.

"The key reason why we are having that bifurcation between those two metrics is the fact that there is pressure in the industry to reduce how much silver is applied to each [solar] panel," he added. "So we're seeing average loadings come down."

Nearly 58% of annual global demand for silver comes from industrial applications, of which 29% comes from the photovoltaics industry.

Estimates suggest that silver loadings in solar panels fell by about 20% in 2024, and that thrifting continues. "But that does not detract from the fact that demand is still outpacing supply," Newman said.

Though the global supply deficit has grown smaller since 2023, "it is still substantial," he said.

Global demand has also been helped by institutional investors, which have added to their net long positions since early 2024, he said.

In addition, net silver holdings in exchange-traded funds rose by 16 million oz in 2024, the first positive influx since 2021, Newman said, adding that ETF inflows are already set to eclipse 2024 totals.

But concerns about the Chinese economy, and the potential effect on base metals, "has weighed on silver in terms of its ability to outperform gold," he said, noting that silver often trades as an industrial metal and that the gold/silver ratio was still historically high at 90:1.

Additional factors include weakening consumer sentiment in China and a softening trend seen in recent producer price index reports. "All of this has really brought pressure on the silver price," Newman said.

"We do think silver prices, like gold, will strengthen ... not just for this year, but into next year as well," he added. "And although we have some of these challenges, we should see silver do fairly well, and therefore perhaps see that ratio fall further."

In its World Silver Survey 2025 report released in April for the Washington-based Silver Institute, Metals Focus forecasts global silver supply to rise 2% in 2025 to 32,056 mt from the previous year and global demand to decline 1% to 35,716 mt.