The industrial half of silver, and why it behaves like two assets

Silver sits in two markets at once and does not behave quite like a member of either. It is bought as a store of value, in coins and bars and exchange-traded products, in the way gold is. It is also consumed, permanently, in factories, in the way copper is. Most years the second use is the larger one.

That combination is unusual enough on its own. What makes it genuinely awkward is the supply side, where the picture inverts.

The demand side is majority industrial

On the Silver Institute's figures for 2025, total silver demand was 1.13 billion ounces, of which industrial fabrication accounted for 657.4 million ounces. That is close to three-fifths of demand, a calculation from those two published figures rather than a share the survey itself prints.

Within the industrial total, electrical and electronics is the largest block, followed by photovoltaics and brazing alloys. In 2025 electrical and electronics fell 2 per cent, brazing alloys rose 1 per cent, and other industrial uses fell 7 per cent, with the industrial total down 3 per cent on the year. The year before had been the fourth consecutive record, with industrial demand reaching 680.5 million ounces in 2024.

The rest of demand is the part that looks like gold. Jewellery fabrication fell 8 per cent in 2025 and silverware fell 21 per cent to a four-year low, while coin and net bar demand rose 14 per cent.

The physical reason industry finds silver hard to replace is straightforward, and the Silver Institute states it directly: silver has the highest electrical conductivity of any metal, and conducts heat better than copper, aluminium or bronze. Where a design needs the best conductor available in a very thin layer, there is no close substitute.

Solar is the sector that changed the mix

Photovoltaics went from 11 per cent of total industrial silver demand in 2014 to 29 per cent in 2024, on figures published by the Silver Institute with Oxford Economics. That is the largest shift in the composition of silver's industrial demand over the decade, on the same figures.

It is smaller than the growth in solar itself, and deliberately so. Over the same decade, installed photovoltaic capacity rose more than tenfold while photovoltaic silver demand rose only about threefold. The report attributes the gap to thrifting: manufacturers systematically reducing the silver content of each cell. The incentive is direct, because silver is between 5 and 10 per cent of a module's manufacturing cost.

Thrifting does not run in a straight line, though, because cell designs keep changing. A TOPCon cell consumes about 50 per cent more silver than the PERC design it replaced, and TOPCon sales overtook PERC for the first time in 2024. Silver-coated copper powder, one of the substitution routes under development, reduces silver consumption by 30 to 50 per cent at a conversion-efficiency cost of under 1 per cent. The direction of travel is toward less silver per watt; the path is not monotonic.

Geographically the growth was concentrated. On the Silver Institute and Oxford Economics figures, China accounted for 51 per cent of the decade's growth in installed photovoltaic capacity, Europe 15 per cent and the United States 9 per cent.

Vehicles are the other structural story. The same report puts battery electric vehicle consumption at 67 to 79 per cent more silver than internal-combustion vehicles, and electric vehicles are forecast to overtake internal-combustion as the primary source of automotive silver demand by 2027, reaching 59 per cent of the automotive share by 2031.

The supply side is mostly somebody else's decision

Here the picture reverses. On the Silver Institute's figures, only about 28 per cent of mine production comes from mines whose primary product is silver. The other roughly seven-tenths is recovered as a by-product from primary gold mines and from base-metal operations, with lead and zinc mines remaining the largest single source in 2025 even as their share fell. Output from gold operations rose 5 per cent that year and from copper operations 6 per cent.

Total mine production was 846.6 million ounces in 2025, up 3 per cent. Recycling supplied a further 197.6 million ounces, up 2 per cent and a twelve-year high. The Silver Institute recorded 2025 as the fifth consecutive year in which demand exceeded supply.

The consequence of by-product supply is that most silver production does not respond to conditions in the silver market. A zinc miner does not open or close a pit because of what silver is doing; the silver comes out either way, and the decision that governs the volume is a decision about zinc. Where a metal's demand is driven by one set of industries and its supply is set by an unrelated set, the two halves adjust to each other slowly, which is a large part of why silver's supply and demand balance can stay in deficit for years at a time rather than closing within a season.

The recycling loop has barely started for solar

Recycling is a meaningful share of supply, but almost none of it currently comes from solar panels. Module lifetimes run to about 25 years, and the enormous installed base of the past decade has not reached the end of one. The panels that will eventually return silver to the market are, for the most part, still on roofs.

That gives the solar sector an unusual shape. It is simultaneously the largest source of demand growth and a source of future secondary supply that has not begun to arrive, and the volume that eventually arrives will reflect the silver loadings of a decade earlier rather than today's thrifted ones.

Where to look next

• Silver in Australian dollars - the reference price page for the metal.
• Gold in Australian dollars - the metal whose demand is dominated by jewellery, investment and central banks rather than by industry.
• Palladium in Australian dollars - the metal where one industrial application really does dominate demand, and where supply is also a by-product.

Sources

• The Silver Institute, World Silver Survey 2026 press release (15 April 2026) - 2025 total demand of 1.13 billion ounces, industrial demand of 657.4 million ounces and its components, the jewellery, silverware and coin movements, mine production of 846.6 million ounces, recycling of 197.6 million ounces at a twelve-year high, lead and zinc mines as the largest single source of mined silver, and the fifth consecutive annual deficit
• The Silver Institute, Global Silver Investment to Remain Strong in 2026 (10 February 2026) - the finding that primary silver mines account for 28 per cent of mine production, with the balance arriving as a by-product of primary gold mines and base-metal operations
• The Silver Institute and Oxford Economics, Silver, The Next Generation Metal (December 2025) - photovoltaics at 29 per cent of industrial demand in 2024 against 11 per cent in 2014, installed capacity rising more than tenfold while photovoltaic silver demand rose threefold and the attribution of that gap to thrifting, silver at 5 to 10 per cent of module manufacturing cost, the TOPCon and PERC comparison and the 2024 crossover, silver-coated copper powder reducing consumption by 30 to 50 per cent, the regional shares of capacity growth, the battery electric vehicle silver comparison and the automotive forecasts, the 25-year module lifetime and the resulting absence of photovoltaic recycling, and silver's conductivity relative to other metals
• The Silver Institute, Silver Supply and Demand - the 2024 comparators, including industrial demand reaching a record 680.5 million ounces in the fourth consecutive record year

Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.