According to China Nonferrous Metals News, driven by expectations of the Federal Reserve's accommodative monetary policy and persistent tight silver supply, international silver prices surged significantly this year, repeatedly hitting record highs. Currently, the Fed remains in the early stages of its easing cycle, with room for further rate cuts and balance sheet expansion. Additionally, buoyed by resilient silver demand in photovoltaic applications and growing Indian silver consumption, international silver prices are poised to continue climbing and surpass previous peaks.

Data indicates that global silver mine supply reached 7,000.6 tons in the third quarter of this year, a 1.64% decrease from the second quarter. In the fourth quarter, silver supply is projected to tighten further compared to the third quarter, with total mine supply expected to reach 6,887.81 tons—a 1.61% decline from the previous quarter. The primary reductions stem from Eastern Europe and Latin America. Eastern European silver mine output will decrease from 656.13 tons to 608.93 tons, while Latin American silver mine output will decline from 3,534.49 tons to 3,489.06 tons.

Photovoltaic cell production showed signs of recovery upon entering the third quarter. Relevant data indicates that in October, domestic photovoltaic cell production reached 59.27 GW, marking a year-on-year increase of 16.4%. By October this year, cumulative photovoltaic cell production reached 567.11 GW, up 3.73% year-on-year, with the cumulative value showing a significant improvement compared to the -7.09% recorded at the beginning of the year. Concurrently, the scheduled output for photovoltaic cells in November reached 58.68 GW, with the operating rate rebounding to 57.79% in October—exceeding the same period last year.

China remains the core region for global photovoltaic industry development, where silver consumption for photovoltaic applications constitutes a significant portion of domestic silver demand. This reflects how, under the high-quality development strategy, China's silver demand increasingly concentrates in sectors related to new productive forces. However, this also implies that amid persistently rising silver prices, silver paste as an industrial raw material will inevitably face cost pressures. Copper-substituting-silver technology has emerged in response, and this technological approach will continue to advance, exerting downward pressure on silver demand in the medium term. Yet, looking at the fourth quarter, the penetration rate of copper-substituting-silver technology in the currently dominant TOPCON-type solar cells remains very limited. Against the backdrop of expanding total solar cell production, silver demand for photovoltaic applications remains robust.

With the sharp rise in silver prices, India's silver imports have rebounded. Concurrently, India's stock indices have shown strong performance this year, driving increased demand for precious metals.

Data from India's Ministry of Commerce indicates that in August, India's net silver imports totaled 410.85 tons, a significant decrease compared to the same period last year. In the first eight months, India's cumulative net silver imports reached 3,303.78 tons, down 42% year-on-year. With silver prices surging and India's peak silver consumption season approaching, traders anticipate annual imports will reach 5,500–6,000 tons this year. Based on a 6,000-ton annual import volume, India is projected to import 2,696 tons of silver from September to December—significantly exceeding the same period last year.

By the end of the third quarter, spot silver tightened, with the one-month overseas silver spot lending rate reaching a high for the same period in recent years. It accelerated its rise after October, hitting a phase high of 40.3% on October 10. The tight spot silver supply eased somewhat in late October. As of November 17, the one-month silver lending rate had fallen to 6.07%, though it remained relatively high compared to recent years.

Strong overseas investment demand for silver is a key factor behind the tight spot supply. Driven by expectations of loose monetary policy from the Federal Reserve, international silver prices have shown robust performance this year. As of October, the LBMA silver inventory—the world's largest—stood at 26,255 tons, significantly below the combined holdings of major overseas silver ETFs, with the gap exceeding 1,000 tons. Considering that most of the physical silver held by ETFs is stored in the London Bullion Market, London's available silver inventory is extremely limited.

Looking ahead to the fourth quarter, overseas physical silver is expected to remain structurally tight. With signs of stock market bubbles intensifying in Europe and the US, and silver prices remaining robust, it is unlikely that holdings in silver ETFs—used as asset allocation tools—will see a significant decline. Concurrently, India's silver imports are expected to surge substantially in Q4, while China's silver demand for photovoltaic applications remains resilient. Given these factors, the global silver shortage is unlikely to be fully alleviated. After a period of correction and consolidation, international silver prices are poised for a new round of upward momentum.

As an integrated internet platform providing benchmark prices, on November 25, the benchmark price of silver on SunSirs was 11,891.00RMB/kg, an increase of 3.62% compared with the beginning of the month (11,476.00 RMB /kg).

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