Silver has the enviable position of not only being a precious metal but also being a metal that has numerous industrial applications because of its different attributes, such as is high electrical conductivity and high reflectivity as well as superior thermal conductivity.
While the past two years weren’t so good for this precious metal because of disruptions caused by the COVID-19 pandemic, 2022 and the years to come seem poised to reverse this trend and get the white metal soaring once again.
The first factor that could drive up demand for silver is the increased use of the metal in the jewelry segment, especially in India. The depressed prices due to the pandemic and its effects have created an increased use of this metal in jewelry making because the finished products will be affordable for the intended users. As more demand is exerted by this segment, there will be upward pressure on the commodity’s price.
The second factor favoring a price surge by silver are the changing policies aimed at phasing out internal combustion engine vehicles and promoting electric vehicles. EV circuit boards, semiconductors, sensors, batteries and other associated technologies including EV chargers all require a larger quantity of silver than that required by traditional vehicles. The more people switch to EVs, the more silver will be required to address that growing demand.
The switch to electric vehicles is occurring at a time when emphasis is being placed on moving away from carbon-based sources of energy such as coal and replacing those energy sources with renewable sources, such as solar energy, wind energy and hydroelectric energy. The demand for silver from the photovoltaic segment alone could easily grow to 185 million ounces of the metal by 2040 in order to meet the growing demand for solar energy installations.
Given the growing need for silver for different industrial applications, especially those related to enabling the transition to a greener economy, it is unlikely that production will grow in tandem with the growth in demand. Consequently, constraints on the supply side are likely to see the price move upwards, and this price movement may attract more institutional and other major investors into the space. Those investment inflows could bring some stability to the rate at which prices go up, but investments alone will not be sufficient to bridge the difference between the demand and supply of silver. This puts sector actors such as Asia Broadband Inc. (OTC: AABB) in a good place to benefit going forward.
NOTE TO INVESTORS: The latest news and updates relating to Asia Broadband Inc. (OTC: AABB) are available in the company’s newsroom at https://ibn.fm/AABB
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