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Silver's Long-Term Future As An Industrial Metal Tends To Be Underestimated

Zoltan Ban profile picture
Zoltan Ban


  • In the past few years we have seen a period of industrial thrift when it comes to silver use, due in large part because of the last price spike.
  • While this trend gave rise to the notion that silver is likely to see weak demand from industrial applications, in reality this period made its use economically viable.
  • The period where thrift in use outpaced demand for industrial products such as solar panels is most likely over.  The opposite is likely to be the case going forward.

There have been many worries recently in regards to Silver's outlook in terms of its future as an industrial metal. News that solar panels for instance will not use nearly as much of it as previously thought, given technological innovations put a damper on expectations from what is now silver's main source of industrial demand. There have been some suggestions that the solar industry may be able to go silver-free altogether, although at the moment that looks very unlikely to happen. I think that it is especially unlikely to happen, precisely because silver is increasingly making up a smaller portion of the overall cost of a solar panel. In effect, the very innovations that are cutting its use are also making it more viable.

It is said that a solar panel may only need about a fifth of the silver content it needed just a decade ago, thanks to innovative solutions meant to cut back on the cost of the silver content. This certainly makes sense, because silver is by no means one of the cheapest industrial metals out there. But we should not lose sight of the longer-term prospects of silver demand stemming from this industrial application, and simply assume that silver use thrift will continue to outpace demand for solar panels. As I pointed out in an article I wrote a year ago called "Not Enough Silver To Power The World Even If Solar Power Efficiency Were To Quadruple", even if we were to assume a further cut into silver use per unit of energy produced from solar to one quarter of current volumes, there would still not be enough silver in the ground and above ground to meet the world's energy demand through only solar power. In fact, even assuming that recoverable silver under ground is still far more plentiful

This article was written by

Zoltan Ban profile picture
My name is Zoltan Ban,  I have a BA in economics. I am a personal investor with over a decade and a half of active trading experience.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I own physical silver.

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Comments (4)

"bi-product"? Is that something produced at LGBT factories?
That's a good one DrT !
As a silver bug I can hope we will see a resurgence in black and white photography using film. (just like vinyl is being rediscovered as a replacement for CDs and MP3)
dieuwer profile picture
Are we not overdue for a price spike?
Between 1980 and 2000 (the previous precious metals bearmarket) silver spiked four times by 60+%: in 1983, 1987, 1993, and 1997.
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