Silver investment demand hit a 5-year high in 2020. It won’t likely slow in 2021. And while industrial demand took a big hit due to the coronavirus pandemic, it is expected to rebound as the global economy begins to recover.
Silver demand will also likely get a boost from the push toward solar power and other green energy initiatives in the coming years. Solar power generation is expected to nearly double by 2025 according to a report released last summer by the Silver Institute. Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives.
On the supply side, mine output fell sharply in 2020. Production was projected to fall by 6.3% to about 780.1 million ounces. The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1.3% in 2019.