The price of silver has shown no sign of stabilizing for a long time. During Diwali, it hovered around 1.50 lakh INR per kilogram, yet post-festivities, expectations of a price drop were unmet as it skyrocketed to 2 lakh INR per kilogram just two months later. This leap from one to two lakh per kilogram took less than a year.
Over the past year, silver's price has escalated dramatically. From approximately 90,000 INR per kilogram in December 2024, it has more than doubled. On Friday, silver's price on MCX reached 205,000 INR per kilogram. Many experts interpret this surge as a significant indicator.
The Growing Demand for Silver
Why is silver becoming increasingly valuable? Is everyone buying silver, or are there underlying reasons? Experts suggest a multi-faceted increase in demand. While silver's attraction for jewelry remains constant, its industrial demand has shifted the dynamic. As gold becomes pricier, consumers are turning towards silver.
Silver demand statistics reveal that its use now extends beyond adornments, with rapid growth in its application in electric vehicles, solar panels, and 5G chips. The industrial demand for silver has seen a sudden rise.
In today's rapidly evolving world, as countries invest more in clean energy and digital infrastructure, silver consumption is reaching unprecedented heights. Electric vehicle demand is rising globally, including in India, where electric vehicle sales increase annually. Silver is also essential in solar panels and catalytic converters.
Silver Use in Electric Vehicles
Every vehicle employs silver, but hybrid and electric cars utilize more of it compared to traditional gasoline or diesel vehicles. Experts note around 15-28 grams of silver in conventional vehicles, approximately 18-34 grams in hybrid vehicles, and generally 25 to 50 grams in electric vehicles (EVs).
Silver is predominantly used in the electrical systems of electric and hybrid vehicles, enhancing safety and technological advancement with applications in switches, connectors, sensors (such as airbags and power windows), and battery management systems.
Source: aajtak
Regardless of a car's size or price, silver remains a key component. It's utilized in electric cars' solar panels, power electronics, transmission systems, electric engines, high-voltage cables, battery management, and battery packs.
Experts indicate every electric connection is coated with silver to ensure smooth operation of an electric car. Future trends will likely see increased demand for silver as vehicles continuously receive high-tech feature updates.
Hoarding Contributes to Silver's Rising Price
As India's electric vehicle charging infrastructure improves and battery swapping services commence, consumer trust in electric vehicles will grow, potentially raising silver prices. Additionally, global silver supply is tightening, with reports of hoarding contributing to price hikes.
India ranks among the world's largest silver consumers, producing roughly 700 tons annually while consuming several thousand tons, necessitating significant imports. In 2024, India imported a record 7,600 tons of silver, primarily for electronics, solar, electrical, and other technical uses. The Indian jewelry market boasts the highest silver demand globally, with an annual usage of approximately 2,730 tons solely for jewelry. Investment demand in the form of coins and bars is also rising.
