The ongoing energy crisis in Europe is about to skyrocket the demand for precious metals.
Key Details
- The demand for solar panels may cause silver demand to increase by 15%.
- A report from London-based Metals Focus, an independent precious metals research consultancy, says that the ongoing energy crisis will benefit precious metals markets.
- “The amount of silver used in solar cell production will exceed 3,900t (126Moz) this year, up 15% y/y. To put this into context, this will account for almost 25% of total silver industrial demand (forecast at 533Moz for this year),” says precious metals and commodities authority Kitco News.
- “Overall, the consultancy expects that the steadily growing PV market, coupled with further expansion of the 5G infrastructure and the growing trend of automotive electrification, will help support silver offtake in the electronics sector.”
- Silver has lost a lot of its value in 2022, dropping 26.9% since April 18, 2022.
Why it’s news
The energy crisis could be an opportunity for silver investments.
As we previously reported, silver suffered five consecutive months of decline this year. The decline went against market expectations as precious metals with industrial applications are widely considered safe bets as they are always in demand.
This new report goes against the current status of the market and suggests that the opportunity may provide an upswing for precious metals investments.
Backing up a bit
Europe and other industrialized nations have an incentive to push for technologies that use silver.
Energy producers are frantically searching for and attempting to implement new energy technologies that will make the continent energy independent from Russia, in the aftermath of the Ukraine war.
They’re already attempting to upgrade their infrastructure in the short term and are expecting Russia may indefinitely turn off their gasoline and natural gas supplies.
The search has left Europe vulnerable in the short term though, with expectations of rolling blackouts and energy shortages likely to impact major countries this winter and potentially threaten lives.
“Photovoltaic (PV) systems are set to break installation records in 2022 as the Russia-Ukraine conflict highlighted the need for a more rapid transition to clean energy. For example, Europe has decided to secure energy sovereignty by cutting its reliance on Russian fossil fuels by 2027 amid soaring electricity prices, with a cumulative solar deployment target of 320GW by 2025,” says Kitco News.