Silver becomes the new favourite amid strong buying, low recycling and rising imports

Ketan S Dhruv, Director at Bangalore Refinery, says silver has seen one of its strongest years in over a decade, with demand surging across industrial buyers, retail investors and exchange-traded products.

“Silver has been a fabulous year in terms of demand… I don’t remember such demand in the past 15 years,” Dhruv said, adding that the momentum is expected to hold at least for the next quarter.

He added, “We feel that the demand will sustain, at least for the next quarter. We have seeing stable demand, even at high prices, from the industrial side of the business as well, and also from the retail side as well.”

India’s industrial consumption of silver has risen sharply this year. According to Dhruv, demand from industries has increased by nearly 10-15%, even though silver prices have almost doubled. He noted that manufacturers have not cut back their usage, showing strong underlying requirements for electronics, solar components and emerging technologies.

Read Here | Silver hits all-time high globally, India prices may cross ₹2 lakh per kg

He added that industrial demand could have been even higher if certain trade-related challenges were resolved. “If there was a US trade deal in place, we would have seen stronger demand in the last quarter,” he said.

Retail buying has been a major driver of silver demand in 2024. Silver kilo bars have emerged as a favourite among investors looking for a cheaper alternative to gold amid rising global uncertainty. Dhruv estimates that investment demand is nearly 2–3 times higher than last year, supported by robust ETF inflows and increased allocations from high-net-worth individuals and family offices.

Even with high prices, recycling activity has fallen. Typically, recycled silver contributes about 10% to overall supply, but Dhruv says the number has dropped to 6-8% this year. Consumers are choosing to hold silver instead of selling, indicating strong bullish sentiment and confidence in further upside.

The Indian market is currently trading at a slight discount due to a sharp price rally over the past few days. Silver prices have climbed nearly 5% in two to three sessions, prompting some profit-taking among traders. Despite this, Dhruv says prices remain firm globally, with silver holding around $62 per ounce, and above ₹1.9 lakh per kg on MCX.

Dhruv expects India’s silver imports to be at least 2x—and possibly 3x—higher compared to last year, while he awaits for official data. The spike in imports reflects a mix of strong domestic demand and limited recycling inflows.

Also Read | Silver prices make new records on hopes of Fed rate cut, tight supply