Silver’s Industrial Anchor Starts to Slip as Solar Makers Ditch for Copper

The narrative that underpinned silver’s long-term bull case is fracturing. For years, the metal’s industrial demand story rested heavily on solar photovoltaic manufacturing, but a cost-driven exodus is now reshaping the landscape. Longi Green Energy is already mass-producing back-contact cells that use copper instead of silver from the second quarter, while Jinko Solar has lined up large-scale copper-based panel production and Shanghai Aiko Solar has launched silver-free cells. The shift is not marginal: silver’s share of module costs ballooned from roughly 3% in 2023 to between 17% and 29% today, forcing manufacturers to look for cheaper alternatives.

The impact on consumption is already visible. Silver demand from the photovoltaic sector fell 6% to 186.6 million ounces in 2025, and industry estimates point to a further 19% decline in 2026 to around 151 million ounces. That contraction threatens to hollow out what had been the strongest pillar of industrial offtake, even as other segments like electric vehicles and AI hardware continue to grow.

The supply-demand arithmetic is adjusting rapidly. The Silver Institute still projects a sixth consecutive global deficit in 2026, but the size of that shortfall is now fiercely debated. UBS slashed its deficit forecast by 80%, bringing it down from 300 million ounces to a range of 60–70 million ounces. The bank also cut its price targets: the end-Q2 forecast dropped from $100 to $85, the September target from $95 to $85, and the year-end view now sits at $80, with the March 2027 projection sliding to just $75. Bank of America goes even further on the risk side, warning that the deficit could shrink by 90% in 2026 if industrial consumption weakens further. That tension between structural scarcity and potential demand destruction defines today’s market.

Should investors sell immediately? Or is it worth buying Silber Preis?

Geopolitical developments added a short-term headwind last week. Reports of a possible truce extension between the US and Iran reduced safe-haven buying, and silver closed at $75.83 on Friday, down 0.5%. Over the trailing 30 days the metal still shows a 5.95% gain, and it is up 4.93% year-to-date. The 52-week high of $116.89 now sits 35% above current levels, underscoring how far sentiment has shifted.

Monetary policy remains a separate drag. April’s CPI data printed at 3.8%, the highest since May 2023, with energy prices surging 17.9%. The CME FedWatch tool prices zero rate cuts for 2026, and higher interest rates make non-yielding silver less attractive compared to income-bearing assets. The next test comes on 16–17 June with the FOMC meeting; a hawkish dot plot could extend the current consolidation well into the third quarter. Only a clear signal of a possible September cut might reignite upward momentum.

Technically, the metal is treading water. Friday’s close sits just 0.35% below the 50-day moving average of $76.09, while the 100-day average at $81.73 remains a distant resistance. Until silver can clear the 50-day line, the consolidation phase will likely persist. The coming week brings JOLTS, ISM manufacturing data, and the May non-farm payrolls report — any downside surprise on jobs could revive rate-cut speculation and lift silver.

Despite the headwinds, a structural floor remains. Roughly 70% of global silver output comes as a by-product of copper, lead, and zinc mining, so supply cannot ramp quickly in response to higher prices. Since 2021, cumulative deficits have pulled nearly 762 million ounces out of inventories. That legacy of depletion means the market is not balanced, even if the deficit is narrowing. Silver’s future hinges on whether industrial thrifting accelerates faster than new demand from electrification and AI, and on how soon the Federal Reserve gives the green light for a sustained rally.

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Silber Preis Stock: New Analysis - 31 May

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