Here's another free, public guest post from AGXIIK and his "editor", Renozep. Please read and consider and, if you find this helpful, please pass along the link to others.
Silver Supply And Demand (The New Samsung Battery Could Be A Gamechanger), by AGXIIK and Renozep
Renozep, my fellow writer and editor sent me a brief article on Samsung's new EV battery that was amazing and even a bit shocking in the scope of how it could change the world's perspectives on EVs.
Silver was noted as an important element of the story. The Samsung battery uses 1000 grams or 2.2 lbs of silver as opposed to a negligible 5 grams today. 2.2 lbs or 32 ounces of silver could rock the world of silver miners and anyone involved in that trade. Stackers and investors in silver mines might find this news important, too.
A snapshot view of silver supply and demands tells two stories, both distressing.
From 2015 to 2023 silver production DECREASED by 44 million ounces. 2024 will show 1003 MOZ production, a further 7 MOZ decline. This is the wrong direction.
From 2015 to 2023 silver demand INCREASED 130 million ounces to 1195 million from 1065 ounces with 1219 MOZ demand expected in 2024.
While a good development if you're a manufacturer using silver in your goods, silver shows a 219 million ounce deficit in 2024. If that wasn't bad enough imagine what we'll see in 2025 when the Samsung battery hits it stride.
For 10 years, the talk was about how solar panel demand in China and India would cause big silver shortages. That one main theme said silver prices should skyrocket as the demand and supply of silver diverged. Ten years later, silver is still stuck in neutral despite a 219 million ounce deficit.
Whether this new battery will move the needle is speculative right now but if solar panels and other commercial uses of silver caused the present day supply deficit, what happens when demand continues to ramp up. Right now we have a 219 MOZ deficit while silver production drops.
As bad news goes this is really bad but it could be an even bigger deal in a few years or sooner if the X axis of production and the Y axis of demand go sideways and we have a critical supply deficit.
A continual and dramatic widening of this gap, as production continues to drop and demand ramps upward; what will this say to the silver producers, bullion banks, government actions to protect supply, those who's jobs are to control silver price and, ultimately, what the market will say about the real price of silver.
China is covertly buying silver dore at above spot. What are they expecting as frantic hoarding of the color continues off the books. The bullion banks are already being drained despite efforts to slow that action.
This short article is a good place to start.
One thing is certain. When a vital national resource is scarce the government resorts to its worst instincts as it steps in to fix the problem.
What sort of fixes will we see when formal government policies remain focused on the EV market, renewable energy, green initiatives and the powerful shift away from fossil fuels? If demand rises as much as expected with this new battery, something has to give.
Let's look at just one segment of battery demand.
Samsung's battery uses 1000 grams of silver as opposed to 5 grams for the convention Tesla type. 1000 grams is 2.2 lbs of silver. A pound of silver is 14.58 ounces. 2.2 lbs is 32 ounces. We'll use ounces for easier comparison to global supply and demand.
It's useful to know expected annual production of passenger vehicles in 2025 to give a good guesstimate of EV demand.
Global light vehicle production forecast 2025 | Statista
Is it possible that 2025 global light vehicle demand will be 94-99 million units!? I was surprised at this demand but it gets better. What percentage will be EVs? 10-15% or more? There are some guides to that question.
In China, 50% of the cars are electric. Globally, 25% are EVs. Taking the low end, add a meager 10% and we could easily see 9,000,000 EVs.
Will the manufacturers be satisfied with old tech EV batteries that have a 250 mile range, take hours to charge and last 8 years? Will this new battery cause Musk to soil his tighty whiteys?
Or will every EV company immediately demand Samsung power cell with its 600 mile range, 9-minute charging and 20-year life span, thus removing buyer range anxiety and long charging times when the open road beckons?
If my math holds up, sometimes a tall order, taking just 9,000,000 EVs manufactured in 1 year, each using 2.2 lbs or 32 ounces of silver per car that's 288 million ounces a year. Is that possible? It might actually be probable. Maybe it's a certainty to those who must deal with these shortages and do so right now.
If present EVs use 5 grams, a negligible amount when compared to total demand in 2024, over the next couple of years we could see a severe supply problem if these batteries are the next best thing. Lexus, Audi and other high end car manufacturers are selling EVs with Samsung's tech. The rest of the car companies must adopt this new battery or be left far behind
Will 250-300 MOZ of silver be available in time and at present prices?
Heck no! Basic numbers tell a distressing story.
Will we be ready in time? No chance.
Or will companies demand a national Marshall plan to meet EV production? That dog might bark.
What about all the other uses for new battery tech? There're dozens including Power Walls for home and industry. Now we're talking about changes that could shake the world.
Just as ICE vehicles replaced horses and battery powered cars which first hit in 1884, 140 years and many iterations of EVs later, this new battery may be the thing that actually has ICE users to think twice about their next car, or even retire Old Betsy to second car status.
First Electric Car: A Brief History of the EV, 1830 to Present
Worldwide the demand could be 20-30 million EVs.
If the global supply is 1.003 billion ounces and declining what happens when demand hits 1.4 billion ounces or more? It could happen.
If silver prices went to $50 an ounce, the miners would be digging to China for the color. If silver prices went to $100 an ounce each battery would have $3,200 of silver. Would that make a difference in demand? It's doubtful. Audi plans to go all electric within a few years so 2025 may be the last year when this brand shows prices this low. Low!?!?
Audi 4 through 8 models range from $42,000 to $92,000 plus destination and taxes. Will a more expensive battery make a difference? I doubt that 3-5% price bump for a superior battery will make much difference when a person shells out mid to high 5 figures or the best EVs on the block.
2025 Audi Passenger Car Lineup: Everything You Need to Know - AudiWorld
The 2 REAL issues are ones that cannot be solved easily or on time.
Can energy producers and the rickety US power grid handle charging demands of 30 million EVs? No chance there. It'll be the biggest pinch point to getting power to the EVs.
Can miners produce enough silver at any price to satisfy 300 MOZ of demand? Not in time. This will produce the perfect storm for silver prices however.
Moral of the story? The best solution for low prices is low prices. Maybe not this time.
Then the mining boom starts when those old mines and leach fields become New Age Comstock lodes and the Argentinian, Mexican and Peruvian mines become the new Mecca for silver production.
The US is rich in silver. Our silver miners plus gold, copper and lead miners will create see massive production increases to meet the demand for 300 million fresh ounces of the shiny.
Could silver quadruple in price? That's a near certainty. What will happen to gold prices? Up, of course.
If you're a stacker keep stackin'. If you're a silver mine investor keep buying.
