In the domestic market, silver prices remained volatile in 2017 touching a high of Rs 43,990 a kg and low of Rs 35,460 a kg. Demand for silver used in solar photovoltaic applications rose 23 per cent last year, the second straight year of increases. Although the amount of silver used in solar cells comes down 5-6 per cent every year. Still, that’s offset by the growth in the overall market of 20 per cent a year.
Hindustan Zinc, which produces 500 tonnes of silver a year, is bullish about the demand in the domestic market. To produce 100 GW of solar energy by 2022, and for producing solar parts, India’s silver consumption will be about 4,000 tonnes.
Seeing the growth opportunity, the company is raising its silver production to 1,000 tonnes over the next 3-5 years. The expansion will give a boost to solar power generation in India and provide the much needed silver as raw material for startups working towards development of solar components indigenously.
Traders expect silver prices to touch Rs 40,000-41,000 a kg in the physical market by the middle of this year as demand for solar panels and electrical vehicles is increasing. The metal closed at Rs 39,237 a kg in the spot market in 2017-end.