Silver: Solar demand headwinds emerge – Commerzbank

Commerzbank's analyst Carsten Fritsch has observed a 10% surge in silver prices to $63.9 per troy ounce, marking its highest level since late June. This price increase has caused the gold/silver ratio to dip below 70, despite solar-sector demand for silver being expected to decline for the second year in a row. BNEF projects a 19% reduction in silver usage for solar module production this year compared to the previous year, with the solar industry's share of total silver demand dropping to 14% from 18%.

This decline is attributed to a decrease in the use of silver in silicon solar cells, with BNEF predicting a further 17% decrease this year, triggered by the record-high silver prices, which reached $120 per troy ounce by the end of January. Despite the price drop of around 50% since late January, silver still accounts for over 17% of solar module production costs, making it the most significant material cost component.