Mitchell Krebs, CEO of Coeur Mining “I have never seen a better outlook for silver. #17 The industry is not able to keep up with the demand, and doesn’t know where supply on the production side will come from. With these supply issues and the current demand profile, deficits are continuing. The consumers who want coins and bars are competing for the same silver that the industrial sector is fighting for. This will support prices.
Title: “Silver’s Remarkable Surge in 2024: A Bullish Outlook Amid Supply Challenges”
Supply Surplus and Demand Deficit
The panelists noted that the silver market is anticipated to face a significant supply surplus this year. However, with demand consistently outpacing supply, this trend may persist well into the future. According to the Silver Institute’s annual silver survey, the market is projected to experience a deficit of 215.3 million ounces, marking the second-largest shortfall in over two decades. Total global silver demand is expected to rise to 1.219 billion ounces, reflecting a 2% increase from the previous year.
Mitchell Krebs, CEO of Coeur Mining, emphasized the transformative nature of the silver market, stating that silver has become an essential industrial metal. He pointed out that the global economy’s shift toward electrification will necessitate a substantial increase in silver usage. “I have never seen a better outlook for silver. It’s an extremely exciting time to be in the silver market,” Krebs remarked.
Industrial Demand and Technological Growth
Matt Watson, Founder and President of Precious Metals Commodity Management, underscored the importance of silver’s industrial applications as technology and the global economy evolve. “The outlook for growth in electronics is phenomenal. It’s the do-it-all metal on the Periodic Table,” he stated. “I don’t see any fundamental downside to silver.”
The panelists highlighted silver’s diverse applications, ranging from medical equipment—thanks to its antimicrobial properties—to various electronic devices, including smartphones and electric vehicles. Notably, the largest industrial demand for silver comes from the renewable energy sector, where it plays a critical role in photovoltaic solar panels. Silver consumption in this sector is projected to rise to 232 million ounces, a 20% increase from 2023.
Supply Challenges Ahead
Despite the strong demand, Krebs raised a fundamental question: where will the supply come from? He noted that the mining sector is struggling to find sufficient silver to replace current production levels. Even if a significant discovery were made today, it would take approximately 20 years for that silver to enter the market due to the lengthy processes of exploration, permitting, and mine construction.
“We are not able to keep up with demand, and I don’t know where the supply on the production side will come from,” Krebs stated. “With these supply issues and the current demand profile, I see these deficits continuing.”
Recycling and the Secondary Market
The secondary market is also unlikely to bridge the supply gap. Darshana Thacker, Global Business Manager at Ames Goldsmith Corporation, explained that while a considerable amount of silver is used in electronic devices, very little of it is recycled. She pointed out that recycling has become increasingly complex, as silver is often mixed with other materials.
“Recycling silver will play an important role in supplying the market,” Thacker noted. “However, investment in new technology is needed to effectively recover the metal. If we don’t improve recycling, I don’t know where the silver supply will come from.”
Watson added that even if the sector doubled the supply of recycled metal, it still wouldn’t be enough to meet the growing demand.
Investment Demand and Market Dynamics
Approximately half of silver demand stems from industrial applications, while the other half comes from investment and jewelry markets. The panelists anticipate that investment demand will rise alongside industrial demand. Danielle Oliari, Chief Operating Officer at CNT Depository, reported a robust secondary market, noting that there are currently more sellers than buyers. However, she mentioned that bullion mint products have been weak this year, allowing the secondary supply to meet demand.
Oliari also indicated that it wouldn’t take much to drive investment demand higher, which would further exacerbate the market’s overall deficit. “The consumers who want coins and bars are competing for the same silver that the industrial sector is fighting for. This will support prices,” she explained.
Price Projections
While the panel did not provide specific price forecasts, their overall outlook remained bullish. A survey conducted at the end of the conference revealed that delegates expect silver prices to rise to $45 an ounce, representing a more than 40% increase from current levels.