Yet No one Takes Notice
It’s said that the stock market trades the future and anticipates it in prices by about six months. Sometimes, it seems that financial markets are not just six months ahead of current developments, but several years. This happens, for instance, when the effects of technical developments are massively anticipated in a hype.
This has occurred in recent years, first with lithium, then with hydrogen, and currently with artificial intelligence. Here, the prices were or are so far ahead of the current technical development that it takes years before the economic dynamics can catch up with the prices. Usually, in these cases, the gap between the far-advanced prices and lagging reality is shortened by massive price losses.
Equally, there are situations and sectors where an emerging development is completely overlooked by the stock market and only recognized much too late. Two sectors where this can currently be observed are uranium and silver. The uranium price has come down significantly from its high of 105 US dollars per pound in recent months, although uranium demand continues to rise steadily and mine production has not been significantly increased.
Silver is Scarcer than most Consumers and Investors Realize
The situation with silver is no less dramatic. Here, global annual production has been in the range of 800 to 900 million ounces for years – sometimes a bit more, sometimes a bit less. However, silver consumption continues to rise and is currently moving towards 1.2 billion ounces. Thus, there is not only a gap, but it is continually widening.
This development didn’t come unexpectedly, as it has been clear for years that silver possesses physically unique properties. It is a very good conductor of electricity and heat and reflects light. Silver is only surpassed in this regard by gold. However, since an ounce of gold is still more than 90 times more expensive than an ounce of silver, it’s understandable why no one currently considers substituting silver with gold.
The rapid expansion of solar energy has caused the demand for silver from this industry to increase extremely over the past two decades. In Great Britain, a new law now requires most houses to be equipped with solar cells. Operators of AI data centers are also heavily relying on the use of solar energy. China’s solar production has now grown so large that it accounts for about one-third of US electricity production – with an upward trend.
An Extreme Surge in Demand is Still Largely Ignored by the Market
Industry experts expect global solar power capacity to increase to an estimated 11,190 gigawatts by 2030. Currently, global capacity is only 2,810 gigawatts. If this assumption is even remotely accurate, the world is facing a demand for silver in the next five years that very few investors currently have on their radar. Each gigawatt of newly installed solar energy requires about 700,000 ounces of silver.
If the predicted expansion of solar energy becomes a reality in the coming years, the world is facing an additional silver demand of 5.87 billion ounces. To meet this, the entire global silver production of the last seven years would have to be made available to the solar industry alone, and all other consumers, such as manufacturers of electric motor vehicles and producers of laptops and smartphones, would be left completely empty-handed.
Let that sink in: In the next five years, not only will more than seven years of world production of silver be needed, but this will be for the needs of a single industry alone. At this point, the question naturally arises whether people will be willing to forgo new laptops and smartphones just to have a solar system on their roof.
Few Companies Mine Silver as a Primary Product
A factor limiting the urgently needed expansion of silver production is that silver is often only obtained as a by-product, for example, of gold mining. Large mining companies that exclusively or at least primarily mine silver are rare.
The role of silver explorers such as Silver47 (WKN A408EQ / TSXV AGA) and Summa Silver (WKN A2P4EE), which are currently merging to achieve faster growth (We reported.), or a company like Silver Tiger Metals (WKN A2P4YL / TSXV SLVR), which is on the verge of initiating the construction of the next major silver mine in Mexico, is all the more important! (See the video below!) Detailed information on these and other exciting silver companies can be found on the Silver theme page at Goldinvest.de
