Understanding silver supply and demand

The silver price surged in 2024, rising from around US$22 per ounce at the start of the year to nearly US$35 by the end of October. Since then, silver has largely stayed in the US$30 to US$32 range, briefly breaking US$34 mark in March.

The metal has seen some support in 2025 due to instability in global financial markets caused by US President Donald Trump’s tariffs and the threat of reciprocal import fees against key trading partners.

These foreign policy shifts by the world’s largest economy have created uncertainty for investors who have been increasingly looking to traditional safe havens like silver and gold to de-risk their portfolios.

However, today’s tariff turmoil overshadows a fundamental shift in the silver market over the past several years, which has seen industrial demand growth start to outpace traditional investment demand.

The most notable demand increase has been due to the energy transition and silver’s use in solar panels.

While firms like Goldman Sachs (NYSE:GS) have predicted that industrial demand will wane over the next few years, Catt’s panelists presented different points of view. Sprott said there will be further demand from the electric vehicle (EV) market as producers look to solid-state batteries, which are not only safer, but also quicker to charge.

“I think (solid-state batteries) will bring back EVs to being viewed as economic,’ he said. ‘Plus the whole processing of solar panels and generating electricity more and more inexpensively over time, it’s just going to make the demand for silver continue to rise here when we already have a shortfall,” he told listeners.

Baker pointed out that solar currently makes up 29 percent of silver’s total 1.2 billion ounces of annual demand, and noted that if that were to disappear, it would have a massive impact on the silver market. However, he also said that even if there were a significant policy shift in the US, there would still be considerable demand for solar worldwide.

“Even in the US, the policy really is ‘all of the above’ — all forms of energy. So I’m not concerned about solar cells diminishing. Could they go flat? Yeah, that’s fine. Flat at 300 million ounces? That’s great demand for silver,” he added.

While most solar demand comes from China, the panelists also discussed India’s growing role in the sector. The country has recently been working to increase domestic production of solar panels.

“(Prime Minister Narendra) Modi made a policy decision a year ago to grow the solar industry in India. So in India, only about 10 percent of their demand for silver is used for industrial purposes. In China, it’s 90 percent, and so what you’re going to have in India is you’re going to see their solar panel growth skyrocket,” Baker said.

Of course, demand isn’t the only factor influencing the silver industry.

Supply constraints have helped push the market into a structural deficit over the past several years.

Silver is primarily a by-product metal in the production of copper, nickel, zinc and gold, which makes it highly dependent on dynamics in those markets. As Baker pointed out, silver isn’t a significant source of revenue.

“So even if the price of silver rises significantly, they’re not going to change their operations because it’s not going to matter for a big copper producer,” he explained. Unless there are dramatic production swings for those commodities, supply and demand are unlikely to come into balance in the near term.

Silver price poised to break out?

Over the past year, silver has tested US$35 twice. Using technical analysis, Oliver compared this to how the silver price tested resistance at the US$26 level three times before breaking through.

What he’s seeing in momentum indicators now is similar to what happened at that time. In the lead up, momentum was flat, but once silver hit US$26, momentum saw an immediate 10 percent gain.

‘It came back up a third time to US$26, watch out. It blew your head off,’ he said. ‘Okay, you go back to US$35 again, and the price says, ‘You better watch out, I’m at a triple top, and if I go to US$36, it’s a triple-top breakout.”

“The only issue is now which week punches up there to that 10 percent over level. I think — who knows, it might even be tomorrow, but I think soon we’ll get up there,” Oliver said.

Silver price, May 15, 2022, to May 16, 2025.

Oliver went on to examine the gold-silver ratio, which he said could be suggesting a breakout is overdue. Traditionally, the ratio falls between 40 and 80 to 1, but it’s now closer to 100 to 1.

“I bet both of these metrics will pretty much coincide in terms of upturn, meaning not only a net price upturn in silver, but a relative performance upturn in silver versus gold, and I think that’ll shock people more than anything … especially if all of a sudden silver wakes up in a shocking, rapid way,’ Oliver noted.

‘That’s going to surprise most investors. I think it’s about to happen, the technicals are ripe.’

Silver market still facing manipulation

Addressing manipulation, Sprott suggested silver has been manipulated for the last half century.

‘I look at silver as a market that’s been manipulated for 50 years. We have about eight to 12 major international banks who are short over 500 million ounces of silver on the COMEX, have always been short that product,’ he said.

‘They always make stabs at knocking it down, trying to cover, but the shorts go back up.’

However, Sprott said as the price has gone from the US$20 range to closer to US$35 it has become more difficult for these banks to maintain their positions. “The same thing is true in gold, but in gold we all know that in the last year, when it broke through US$2,000 (per ounce) for the fourth time, it was over for the commercial banks,” he noted.

He went on to discuss how trading on the COMEX seems contrary to what is going on in other markets, saying that when international markets are open, gold and silver prices trade higher, but when the COMEX opens, they tend to fall.

“If you just traded COMEX and you bought silver at the starting value, it’d be worth about 2 or 3 percent of what it started at, whereas if you bought it in non-COMEX hours, it would be worth 600 percent more,’ Sprott said.

In his view, the suppression is ‘obvious.’ However, he predicts that the gold-silver ratio will correct in the near future, and the silver price will start to outperform gold.

What’s the outlook for the silver price?

For his part, Sprott sees the silver price going much higher.

“I’m sure we’re going to be through US$50. It used to trade at 15 to 1 to the price of gold. At today’s price of gold, that would be over US$200. I have no reason to think we’re not going there,” he said.

Oliver had a similar price prediction.

“I think the first surge could get you well above US$50. I think you’d get up in the US$60s and US$70s before you even pause, and I think it could occur rapidly,” he said. Oliver also explained that cryptocurrencies like Bitcoin aren’t an alternative and appear more like a speculative bubble. Given the size of the US debt, Treasuries aren’t as attractive to investors, which is causing further compression in monetary metals markets.

Although Baker didn’t provide a price prediction, he did express support for a market driven by supply and demand fundamentals, saying that “this is a very, very unique time.”

1. BHP (NYSE:BHP,ASX:BHP,LSE:BHP)

Market cap: US$128.63 billion

Mining major BHP owns and operates Australia’s Olympic Dam mine, considered one of the world’s largest uranium deposits. While the site is included in the company’s Copper South Australia operations portfolio and copper is the primary resource extracted, the mine also produces significant quantities of uranium, gold and silver.

In the operational review for its third fiscal quarter of 2025, released in mid-April, BHP reported a decrease in uranium production year-over-year. The company’s fiscal year-to-date uranium production totaled 2,180 metric tons, an 18 percent contraction from 2,674 metric tons in the first three quarters of fiscal 2024.

BHP is advancing its Olympic Dam expansion plan, which includes building a two-stage smelter, with a final decision due in 2026, and the US$5 billion Northern Water project, featuring a desalination plant and 600 kilometer pipeline.

The expansion targets a copper output of 650,000 metric tons annually by the mid-2030s, doubling its current production. While it was previously expected that BHP’s uranium output would expand at a similar rate, causing fear of oversupply and low prices, BHP announced in February that this would not be the case.

Uranium production is expected to rise marginally, by roughly 1 percent.

Additionally, if the company decides to expand the hydrometallurgical plant to process uranium in the future, growth will still be smaller than expected due to lower uranium concentrations in feedstock ore from newly integrated assets Carrapateena and Prominent Hill.

2. Cameco (NYSE:CCJ,TSX:CCO)

Market cap: US$23.2 billion

Uranium major Cameco holds significant stakes in key uranium operations within the Athabasca Basin of Saskatchewan, Canada, including a 54.55 percent interest in Cigar Lake, the world’s most productive uranium mine.

The company also owns 70 percent of the McArthur River mine and 83 percent of the Key Lake mill. Orano Canada is Cameco’s primary joint venture partner across these operations.

Cameco also holds a 40 percent interest in the Inkai joint venture in Kazakhstan, with the rest held by the state company Kazatomprom. The mine produces uranium using in-situ recovery.

Weak spot uranium prices between 2012 and 2020 weighed heavily on pure-play uranium producers. In 2018, Cameco placed the McArthur River and Key Lake operations on care and maintenance, reducing the company’s total annual uranium output from 23.8 million pounds in 2017 to 9.2 million pounds in 2018.

Improving market dynamics prompted the company to restart MacArthur Lake in 2022.

As a full nuclear fuel cycle provider, Cameco, in partnership with Brookfield Renewable Partners and Brookfield Asset Management, completed the purchase of Westinghouse Electric Company — a leading provider of nuclear power plant services and technologies — in November 2023.

In its Q1 update, Cameco reported steady operational and financial performance, with consolidated adjusted EBITDA of C$353 million and adjusted net earnings of C$70 million.

While uranium segment earnings declined due to timing of sales at its Inkai joint venture, average realized prices improved, supported by stronger fixed-price contracts and a favorable US dollar. For 2025, Cameco expects uranium production of 18 million pounds on a 100 percent basis at each of Cigar Lake and McArthur River/Key Lake.

After logistical issues at its Inkai joint venture in Kazakhstan weighed on production growth in 2024, Inkai suspended operations for about three weeks in January due to a directive from partner Kazatomprom. The revised 2025 production target is 8.3 million pounds on a 100 percent basis, with Cameco’s allocation at 3.7 million pounds. No deliveries from Inkai are expected until the second half of the year.

3. NexGen Energy (NYSE:NXE,TSX:NXE,ASX:NXG)

Market cap: US$3.18 billion

NexGen Energy, a company specializing in uranium exploration and development, is primarily focused on the Athabasca Basin. Its flagship project is the Rook I project, which includes the Arrow discovery.

The company also owns a 50.1 percent interest in exploration-stage company IsoEnergy (TSXV:ISO,OTCQX:ISENF).

In its Q1 results, NexGen reported a net loss of C$50.9 million, driven primarily by an impairment on its investment in IsoEnergy and ongoing exploration spending at its Rook I uranium project. Despite the loss, NexGen maintained a cash position of C$434.6 million, down from C$476.6 million at the end of 2024.

The largest component of the cash flow change was investing activities at C$34.3 million, mostly tied to C$28.1 million in exploration and evaluation expenses. The majority of this went toward technical work, permitting, and drilling at Rook I. NexGen also made a C$6.3 million follow-on investment in IsoEnergy.

Financing activity was limited, with C$557,000 raised from stock option exercises and C$6.8 million in restricted cash movements, resulting in a total cash outflow of C$41.9 million.

The company continues to hold a strategic uranium inventory of 2.7 million pounds of U3O8, valued at C$341 million. While NexGen does not currently generate production revenue, it remains well-capitalized to fund its development plans as it progresses Rook I toward potential construction and licensing milestones.

In late March NexGen reported its “best ever discovery phase intercept” at Rook I. As noted in a press release, drill hole RK-25-232 at the Patterson Corridor East zone intersected 3.9 meters of exceptionally high uranium readings within a larger 13.8 meter mineralized section starting at 452.2 meters depth.

4. Uranium Energy (NYSEAMERICAN:UEC)

Market cap: US$2.36 billion

Uranium Energy (UEC) has two production-ready in-situ recovery (ISR) uranium projects — its Christensen Ranch uranium operations in Wyoming and its Texas Hub and Spoke operations in South Texas — as well as two operational processing facilities. It plans to restart uranium production in Wyoming in August and resume South Texas operations in 2025.

The firm has built one of the largest US-warehoused uranium inventories, and in 2022 secured a US Department of Energy contract to supply 300,000 pounds of U3O8 as part of the country’s move to establish a domestic uranium reserve.

UEC also holds a wide portfolio of uranium projects in the US and Canada, some of which have major permits secured. In August 2022, UEC completed its acquisition of uranium company UEX. That same year, UEC also acquired both a portfolio of uranium exploration projects and the Roughrider uranium project from Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO).

In January, UEC increased its stake in Anfield Energy (TSXV:AEC,OTCQB:ANLDF) by acquiring 107.1 million shares for approximately C$15 million, at C$0.14 per share. The deal boosts UEC’s ownership to about 17.8 percent.

A month later, the company announced that it had achieved a key milestone by successfully processing, drying and drumming uranium at its Irigaray central processing plant in Wyoming.

Uranium concentrate produced from the plant will be shipped to the ConverDyn conversion facility in Illinois.

In March, UEC released results for the quarter ended on January 31, highlighting that additional wellfields at Christensen Ranch were on track to begin production in the coming weeks. It also finalized the acquisition of Rio Tinto’s Sweetwater plant, adding 4.1 million pounds per year of licensed capacity and establishing its third ISR hub-and-spoke platform.

Financially, UEC reported Q2 revenue of US$49.8 million from selling 600,000 pounds of U3O8 at US$82.92 per pound, generating US$18.2 million in gross profit. The company holds 1.36 million pounds in uranium inventory valued at US$97.3 million, with an additional 300,000 pounds to be acquired at US$37.05 per pound this December.

In May, UEC signed a memorandum of understanding with Radiant Industries to collaborate on strengthening the US nuclear energy value chain. As part of the agreement, UEC will supply domestically sourced uranium to Radiant. The partnership supports Radiant’s development of the Kaleidos portable nuclear microreactor, which is planned to be mass produced, aligning with growing national interest in small modular reactors and energy security.

5. Denison Mines (NYSEAMERICAN:DNN,TSX:DML)

Market cap: US$1.33 billion

Denison Mines is focused on uranium mining in Saskatchewan’s Athabasca Basin. holding a 95 percent interest in the Wheeler River uranium project, which hosts the Phoenix and Gryphon deposits.

The company has significant landholdings in the basin through both operating and non-operating joint venture interests with uranium majors such as Orano and Cameco. This includes a 22.5 percent interest in Orano’s McLean Lake mill and mine, the latter of which is expected to re-enter production in 2025.

In 2023, Denison completed a feasibility study for Phoenix, which hosts proven and probable reserves of 56.7 million pounds of uranium. The company is planning to use ISR for Phoenix and is targeting first production for 2027 or 2028. Denison also updated a 2018 prefeasibility study for the Gryphon deposit as an underground mine.

According to the company, both deposits have low-cost production potential.

In February, Denison announced that the Canadian Nuclear Safety Commission has scheduled public hearings for the Phoenix ISR project, which will take place in two parts, one in October and one in December.

The hearings are the final step in the federal approval process for the project’s environmental assessment and license to construct and prepare a uranium mine and mill.

On May 12, Denison released its results for the first quarter, noting that Phoenix had reached 75 percent completion for total engineering. If it receives approval later this year, Denison expects to begin construction for the Phoenix ISR operation in early 2026 and achieve production in 2028.

Meanwhile, site prep resumed at the McClean North deposit, which will be mined using the joint venture’s proprietary SABRE mining method. Operations are on track to begin mid-year.

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