Silver shortage predicted by world bank

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The World Bank forecasts that by 2050, consumption of silver in energy could grow dramatically, reaching a level equivalent to more than 50% of the entire current total silver demand—the largest proportion for any non-battery metal. The amount of silver in cars is also climbing sharply. Electric vehicles have a lot more electronics than automobiles powered by internal combustion engines. Silver is an excellent conductor and the metal is required in specialized componentry. Taken together with solar, silver demand could go from 120 million ounces today to as high as 500 million ounces by 2050


Increased use of silver in the production of electric vehicles and solar panels is expected to drive significant growth in demand for the metal in the coming years. According to the World Bank and analysis by Hecla Mining, silver demand could reach as high as 500 million ounces by 2050, an increase from the current demand of 120 million ounces. This growth is largely due to silver's excellent conductive properties and its increasing use in the electronics of electric vehicles and solar panels.

I asked Gemini to fact check the above as it was posted in 2009.

Here is Gemini's 2024 response: The information you provided about silver demand is mostly accurate, but with some key points to consider:

Mostly Accurate:

Silver demand in energy (mainly solar) is expected to grow significantly: There is strong evidence supporting this. A study by the University of New South Wales suggests solar panels could consume a large portion of silver reserves, potentially between 85% and 98% by 2050 [source: aheadoftheherd.com].

Electric vehicles use more silver than traditional cars: This is true due to the increased electronics in EVs [source: Silver Institute reports mentioned in various articles].
Silver demand is projected to rise: There is agreement among analysts that silver demand will grow, with the World Bank being one source of such forecasts [source: Axi - Silver price forecasts]
Uncertainties:

Specific figures: The claim of reaching 500 million ounces by 2050 is a prediction, and such long-term forecasts can be uncertain. There might be variations depending on the source and their specific methodology.

World Bank as source: While the World Bank might have made such a forecast, it's difficult to verify without an exact reference. It's better to rely on multiple sources for such claims.
Here's a more cautious way to phrase the information:

The increasing use of silver in electric vehicles and solar panels is expected to significantly drive up demand for the metal in the coming decades. Analysts predict a substantial rise in silver consumption, with some estimates suggesting a potential increase from the current 120 million ounces to as high as 500 million ounces by 2050. This growth is attributed to silver's excellent conductive properties and its crucial role in the electronics of EVs and solar panels.

By acknowledging the uncertainties, you provide a more balanced view of the information.

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Gemini your earlier answer : "Supply and Demand:This is the fundamental driver of price in any market, including silver. Silver is mined globally, and its price reacts to fluctuations in supply and demand."

Gemini Question: this would seem to suggest that Ag with its increasing use in alternative energy could likely be a likely contender is that correct?.....

Gemini Answer: You're absolutely right. Here's a breakdown of why silver's increasing use in alternative energy makes it a strong contender for the future:

Rising Demand:

The global push for renewable energy sources like solar and wind power is significantly increasing the demand for silver. Silver is a critical component in solar panels and other clean energy technologies.

This rising demand, if not met by a sufficient increase in supply, could potentially drive up silver prices in the long run.

Limited Substitutes:

Unlike some other commodities, silver has limited suitable substitutes in many of its industrial applications, including solar panels. This strengthens its position as a key metal for the clean energy transition.

Growing Market:

The global market for renewable energy is expected to keep expanding significantly in the coming years. This translates to a potentially long-term increase in demand for silver.

Fundamentals Look Promising:

Based on these factors, the fundamental outlook for silver seems positive. However, it's important to consider some additional points:

Supply Constraints: If new silver mine exploration and development don't keep pace with rising demand, it could lead to a supply shortage. This could significantly impact prices.

Short-Term Price Fluctuations: Silver prices can be volatile in the short term due to various factors like economic conditions and speculative trading.

Overall, silver's role in the clean energy sector positions it well for the future. However, careful research and consideration of all factors are crucial before making any investment decisions.

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I asked Gemini: "Is the above factoring in substitution and or demand destruction (decrease in usage) in face of great demand"

Gemini's response:

You're absolutely right. When discussing the potential price increase of silver due to supply constraints, it's important to consider how substitution and demand destruction might play a role:

Substitution:

In some industrial applications, there might be a possibility of finding substitutes for silver if its price rises significantly. For example, in some types of electronics, copper could potentially replace silver to some extent.

However, for many of silver's key uses, especially in solar panels,
there are currently no viable, cost-effective substitutes.

Demand Destruction:

If the price of silver increases dramatically, it could lead to some manufacturers seeking alternative materials or redesigning products to use less silver.

This is called demand destruction, where high prices discourage consumption.
How these factors might influence price:

Substitution and demand destruction could potentially limit the extent of a price increase for silver.
However, the success of these alternatives depends on several factors, including:
Cost-effectiveness: Substitute materials need to be significantly cheaper than expensive silver to be widely adopted.

Technological advancements: Developing and implementing new technologies that use less silver or viable substitutes might take time.

Overall:

While substitution and demand destruction are possibilities, the increasing demand for silver in clean energy and its limited substitutes suggest that their impact might be limited in the short to medium term.

In the long term, technological advancements in substitutes or new ways to use silver more efficiently could play a more significant role.

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I asked Gemini: The Silver Institute estimates that the silver market has seen an 18% rise in demand within the past year, which represents the highest on record it has seen. Specifically, this growth in demand can be attributed to the industrial market, which reported an offtake of 556.5Moz. Is that correct?

That information you provided about the silver market aligns with what credible sources report. According to the Silver Institute, a well-respected source for silver information, the industrial demand for silver did reach record highs recently. Here's a breakdown:

Demand Increase: Yes, it's accurate that the Silver Institute reports a significant rise in silver demand.

Record High: It's also likely true that this represents the highest demand on record.

Here are some resources to verify this information:

Silver Institute: Silver Demand Trend: https://www.silverinstitute.org/silver-supply-demand/
(Look for reports on annual silver demand)

The specific figure of 556.5 million ounces (Moz) for industrial offtake might be from a particular report by the Silver Institute. Without the exact timeframe, it's difficult to pinpoint the specific report, but the Silver Institute does publish detailed breakdowns of silver supply and demand.

Overall, the information you have about rising silver demand, particularly in the industrial sector, seems to be on point.

Gemini: It seems to be incongruous that "the silver market has seen an 18% rise in demand within the past year" but the price response has been weak?

Answer: You're right, it can seem incongruous that silver demand has hit record highs while the price hasn't necessarily followed suit. There are a few reasons why this might be happening:

Supply Keeping Up (For Now): While demand is high, it's possible that mine production or existing stockpiles are keeping pace with the increased demand. This can prevent a significant price increase.

Short-Term vs. Long-Term: The 18% demand increase might be a recent phenomenon. Silver prices can be volatile in the short term and might not always immediately reflect long-term trends in demand.

Speculative Trading vs. Industrial Demand: A significant portion of silver trade can be speculative, meaning investors buying and selling based on market sentiment. This speculative activity might not directly reflect the actual physical demand from industry.

Other Factors Affecting Price: The price of silver is influenced by other factors besides just demand, such as interest rates, the US dollar strength, and overall economic conditions. These factors can also play a role in price movement.

Here are some resources where you can find more information on these factors:

Silver Institute: Factors Affecting the Price of Silver: [invalid URL removed]
Investopedia: Silver as an Investment: https://www.investopedia.com/terms/s/silver.asp
It's important to remember that the silver market is complex, and there isn't always a one-to-one correspondence between demand and price. By considering all the factors involved, you can get a better understanding of why the price might not be reacting as strongly as expected to the rise in demand.

https://www.oxfordgoldgroup.com/arti...lver-so-cheap/

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https://www.401krollover.com/worldwi...leted-by-2025/

https://www.mining.com/silver-market...pply-deficits/

https://www.silverinstitute.org/wp-c...urvey-2024.pdf
"Silver’s supply-demand conditions, meanwhile, are expected to have another
very strong year in 2024. Robust gains from photovoltaic applications and
decent performances in other segments are expected to see industrial
demand reach a new all-time record. An uptick in discretionary spending and
restocking should boost jewelry and silverware demand, driving y/y rebounds
in both demand segments. All this should more than offset the declines we
expect in bar and coin investment, for reasons touched on above. Crucially,
supply will continue to stagnate, with a marginal decline forecast for the year.
This will drive the market deficit up by 17%, to 215.3Moz (6,695t) for the year."

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Here’s a summary of the article in point format:

The Silver Institute released its annual World Silver Survey, conducted by UK-based research firm Metals Focus.

Industrial demand continues to dominate the silver market and is expected to hit another record high this year, rising 9% to 710.9 million ounces.

Demand for silver in Photovoltaic (PV) solar panels is expected to rise 20% to 232 million ounces.
Jewelry fabrication is expected to rise by 4% to 211.3 million ounces and silverware up 7% to 58.8 million ounces.

However, disappointing investment demand is forecasted, with physical bar and coin purchases dropping by 13% to 212 million ounces this year.

Despite investors shying away from the silver market, demand continues to overwhelm supply.
The market is expected to see a deficit of 215.3 million ounces, the second-largest deficit in more than two decades.

Total global silver demand is expected to rise to 1.219 billion ounces, an increase of 2% from last year.

Phillip Newman, Director, and Founding Partner at Metals Focus, said that deficits are starting to matter as above-ground stocks continue to get depleted.

In a world of continuous deficits, higher prices will be needed before stocks are released into the marketplace.

Newman also expects solar demand to continue to grow.

Although investment demand in silver has lagged, causing it to underperform gold, Metals Focus expects that this trend has only started to reverse.

The forecasted 2024 deficit comes as Metals Focus said the deficit in 2023 was 184.3 million ounces.

The silver market has seen a structural deficit for three consecutive years.
Demand last year was driven by industrial applications, which rose to 654.4 million ounces.

[Sparty]

https://smallcaps.com.au/silver-dema...economy-needs/