Greentech demand, supply constraints may fuel silver's bull run

Silver has been among the bestperforming asset classes yearto-date, outperforming gold.

- SANJAY KUMAR SINGH

While it has given a return of 24.7 per cent, the yellow metal has notched up 17 per cent.

Robust demand

Around 60 per cent of the total demand for silver comes from industry. Industrial demand has increased considerably in recent years. "Silver's usage in greentech is propelling its industrial demand, especially from the solar and electric vehicle (EV) sectors. It also finds usage in high-end electronics and 5G technology," says Vikram Dhawan, head-commodities and fund manager, Nippon India Mutual Fund.

While demand has surged, supply has failed to keep pace. "Mining production has been affected by labour shortages and environmental regulations, leading to tighter supplies," says Navneet Damani, group senior vicepresident, head of commodities research, Motilal Oswal Financial Services. According to the Silver Institute's estimates, 2024 is expected to be the fourth consecutive year of supply deficit.

Prices could surge further