- Silver faces a potential surplus by 2030 due to reduced solar industry demand
- Silver prices dropped from $121.65 high to $48.7 per ounce recently
- Indian silver futures fell about 54% since their January peak
Silver's spectacular rally has given way to a steep reversal, and one of the world's major banks believes the metal faces another challenge. BMO Capital Markets expects the global silver market to move from years of supply shortages to a record surplus by 2030, as solar manufacturers reduce their dependence on the metal.
The white metal last traded in the US spot market at $48.7 an ounce, down about $121.65 as against the record high clocked in January this year.
The correction has been severe for Indian investors as well. MCX silver futures stood at Rs 1,76,543 per kg on November 13, 2026, compared with the January 29 peak of Rs 3,82,000. That represents a decline of approximately 53.8% in less than 10 months.
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The metal has also fallen in nine of the past 12 weeks, reflecting weakening sentiment and heavy selling after its extraordinary rally.
BMO identifies the solar industry as a major source of risk. Silver is widely used in photovoltaic cells because of its electrical conductivity.
However, manufacturers are increasingly reducing the quantity required for each panel. Some are also exploring alternative materials as elevated prices make silver more expensive.
The bank argues that this shift could reverse a major source of demand growth. Solar accounted for around 55% of the increase in silver demand over the past five years.
BMO expects the sector to surrender roughly half those gains by 2030. Its analysis suggests that the resulting surplus could reach a record level.
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The warning comes despite forecasts of another annual supply deficit in 2026. Preliminary estimates from the Silver Institute point to a 35-million-ounce shortfall, even as total demand is expected to decline 5% to 1.08 billion ounces. Solar-related silver demand is projected to fall 21% this year.
The disagreement partly reflects how analysts treat investment demand. BMO argues that investment purchases do not permanently consume silver because investors can eventually sell the metal back into the market. Excluding investment demand, it sees the balance moving towards a surplus.
That leaves silver increasingly dependent on investors absorbing excess supply. BMO warns that maintaining elevated prices would require exceptionally strong investment demand for several years. If that buying weakens, the metal could face further pressure.
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