Silver is an important precious metal of great antiquity, endowed with the characteristics of an industrial metal. In recent years, with increasing industrial applications, the importance of silver stands enhanced. The metal exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal.

Admittedly, 2020 and 2021 were not good years for the metal because of slowing industrial production. Disrupted supply chains, raw material bottlenecks and markedly higher energy costs adversely impacted industrial output. As much as 50 percent of silver demand is accounted for by industrial use. Photovoltaics is a key industrial demand segment.

The industrial metal character of silver is expected to gain more traction in the years to come. The metal is favoured for its many useful physical and chemical properties in varied industrial applications including the electrification of vehicles (EVs), 5G mobile phone technology and importantly commitment of various governments to invest in ‘green’ infrastructure.

The current low prices would encourage higher demand for jewellery and silverware from price-sensitive markets such as India. Resurgence in demand and its positive effect on prices would attract financial investors. It may also result in ETF investors joining the bandwagon, resulting in inflows.

While the 2022 demand outlook for silver looks constructive, the best would come in the years ahead.


Sustainability is the buzz word, after the United Nations unveiled the Sustainable Development Goals to be achieved by 2030. Recent policy developments have boosted the outlook for the white metal over the next ten years.

As governments race to decarbonise their economies, the world is rapidly moving toward renewable energy.

Green technologies are the in-thing; and silver has an essential role in green tech. Solar energy is seen as an inexhaustible clean energy to replace fossil fuels. This has led to the rapid advance of solar capacities around the world. In automobiles, Electric Vehicles (EVs) are seen replacing traditional internal-combustion engine vehicles. In both these, silver is used for its special and specific properties. 

Applications in automotive sector

Silver will benefit from applications in the automotive sector - for example, in electrical contacts, micro-processors, memory and circuit boards, radar and camera sensors. Silver is difficult to replace in various automotive applications due to its superior electrical properties. Many are essential for safety and meeting tougher environmental standards.

Studies suggest that in battery-powered vehicles the use of silver will be markedly more than in conventional vehicles. This is in addition to use in charging stations, power generation and other supporting infrastructure that would need this metal.

The Silver Institute estimates that silver demand from the automotive industry will reach 88 million ounces by the middle of this decade (up from just over 60 million ounces in 2021). In 2040, electric vehicles could even devour almost half of the annual silver supply (currently, a good 1 billion ounces).

The installation of solar systems too is driving demand for silver higher. The photovoltaic sector is currently demanding around 100 million ounces of silver annually. Some experts forecast an increase in silver demand to 185 million ounces over the next ten years from the photovoltaic industry.

Given this emerging scenario, silver is expected to benefit the most among precious metals. Silver may not only outperform gold but would at some stage decouple from gold and stand on its own.

The risk that silver supply growth may not keep pace with demand growth is real. So, stakeholders should brace for higher and higher prices in the coming years.

The Government of India should take cognizance of the emerging scenario. Demand within the country is likely to grow rapidly with policy thrust on EVs and solar energy. As import dependence for the metal is set to increase it is necessary to work towards augmenting silver supplies from a long-term perspective.

(The author is a policy commentator and commodities market specialist. Views are personal)