Silver Crashes 39%: Which Stocks and Industries Could Profit from Falling Prices?

Synopsis: Silver’s 46% crash from MCX highs of ₹4.2 lakh/kg to nearly ₹2.25 lakh/kg reshapes cost dynamics across sectors, highlighting how electronics, EVs, solar, chemicals, and jewellery companies and related stocks could benefit from sharply lower silver input prices.

Silver markets have experienced a sharp and unsettling downturn recently after a period of extraordinary gains. After reaching multi-year highs near roughly Rs. 4,20,048 per kilogram on India’s MCX futures and above $121.65 per ounce in global markets, prices have plunged significantly in a very short time. 

Silver contracts fell by double-digit percentages roughly around 46 percent dropping from those peaks back below Rs. 2,25,805 per kilogram domestically and slipping toward $83.39 per ounce internationally as margin-linked selling, rapid profit-taking, and broader market stress forced a correction. This pullback is one of the steepest in recent memory, and has spilled over into equity and commodity markets at large.

The crash followed an intense rally in silver driven by industrial demand and speculative interest, but the metal’s hybrid nature, which is part precious safe-haven, part industrial commodity, made it especially sensitive to rapid shifts in sentiment and leveraged positioning. As traders wound down long positions and a stronger U.S. dollar re-emerged, silver’s price momentum reversed sharply.

As silver prices declined, silver ETFs also dropped sharply. Zerodha Silver ETF 11.34 percent, SBI Silver ETF fell by 14.54 percent, Nippon India Silver ETF declined 12.9 percent, and Kotak Silver ETF was down 14.06 percent.

Sectors to be Benefited 

This fall in silver prices is expected to benefit industries and sectors that use silver as a raw material, as their input costs will decrease. Lower silver prices will reduce production expenses for manufacturers in silver-dependent sectors, potentially improving their profit margins and making their products more competitive in the market.

Technology & Electronics Sector

One of the immediate beneficiaries of lower silver prices can be the technology and electronics industry, which uses silver extensively for its unparalleled electrical conductivity. Silver is a critical component in printed circuit boards, multi-layer ceramic capacitors, connectors, switches, and high-performance semiconductors. These components are foundational for everything from smartphones and computers to 5G infrastructure and advanced data centers. 

A steep drop in silver prices reduces the material cost pressure on electronics manufacturers, boosting margins for companies that have faced cost headwinds from elevated silver input prices over the past year. As silver costs retreat, firms involved in semiconductors and consumer electronics could see production costs diminish and profitability improve, especially for those with slim margins in highly competitive markets. 

Importantly, cost savings could also be passed partially to consumers, enhancing demand for tech products if other market conditions remain supportive. For technology firms already navigating supply chain issues and global demand shifts, this reprieve in raw material costs could come at a well-timed moment. 

Among the listed Indian companies likely to gain are Bharat Electronics Ltd, Optiemus Infracom Ltd, Dixon Technologies, and HCL Technologies. These firms use silver in various electronic assemblies, circuit boards, and devices, so cheaper inputs can support margins and operational efficiency.

Automotive Sector

The automotive sector, particularly makers of electric vehicles (EVs) and advanced hybrids, is another industry that stands to benefit from weaker silver prices. Modern EVs require a significantly higher amount of silver per unit than traditional internal combustion vehicles, using the metal in electrical contacts, sensors, powertrain components, and battery management systems. 

When silver prices move sharply higher, the cost of producing these vehicles increases, squeezing profit margins or forcing price adjustments. With silver prices retreating, automakers can procure this essential material at a reduced cost, potentially lowering overall production expenses. This can translate into improved margins for EV manufacturers or the flexibility to compete more effectively on pricing. 

Lower silver costs also mitigate some of the inflationary pressures on broader automotive supply chains, including wiring harnesses and electronic modules that rely on silver contacts. For suppliers and OEMs focused on electrification, this improvement in input cost dynamics could support better earnings results in the coming quarters. 

Notably listed companies that could see advantages include Exide Industries, Greaves Cotton, Mahindra & Mahindra, and Tata Motors. Lower silver costs can help improve margins and overall cost efficiency in EV and conventional vehicle production. 

Renewable Energy Sector

Silver’s role in the renewable energy sector, especially solar photovoltaic (PV) panel manufacturing, has been both a strength and a burden. Silver is used in the conductive pastes and front contacts of solar cells, where its high conductivity improves efficiency. 

Historically, this drove strong demand but also raised the cost base for panel producers as silver prices surged. As silver prices correct sharply lower, the cost of producing solar panels declines, providing immediate relief to solar manufacturers who have faced rising material costs. This can improve the competitiveness of solar energy projects, lower the levelized cost of electricity (LCOE), and potentially accelerate installations where economics are tight. 

Cheaper silver also lessens the pressure on firms experimenting with silver-reduction or substitution technologies, allowing them more time to innovate without the same urgency driven by high metal prices. Overall, solar and broader renewable energy players are well-positioned to benefit from lower silver input costs, potentially driving higher deployment rates and improved balance sheets. 

Key Indian stocks positioned to gain include Waaree Energies, Vikram Solar, Premier Energies, and Adani Green Energy. With silver being an essential material in photovoltaic cells, reduced prices directly lower production costs and improve project economics.

Jewellery and Consumer Goods

Finally, the jewellery sector could experience positive effects from the fall in silver prices. Jewelry manufacturers, retailers, and artisans often hedge their metal costs, but prolonged high prices have squeezed margins and forced higher retail prices, dampening consumer demand. 

With silver now trading at substantially lower levels than recent peaks, jewelry companies might offer more attractive pricing to buyers or improve their own profitability on existing inventory. This trend can lead to stronger sales in price-sensitive markets, especially during festive or wedding seasons when demand for silver jewelry historically rises. 

Lower silver prices can also renew interest in silver coins and investment bars among retail investors who may have been priced out during the rally. Increased demand in this segment can support related businesses, from minting firms to retail distributors.

Key listed companies in India include Titan Company, Senco Gold, PC Jeweller, Thangamayil Jewellery and Kalyan Jewellers, which can leverage reduced silver costs to boost sales and profitability. 

Additionally, in the chemical sector, silver plays a specialised but important role as a catalyst in several industrial processes. For example, in the production of ethylene oxide, a precursor for plastics, detergents, and textiles, as well as in formaldehyde and other key industrial chemicals.

High silver costs previously added to manufacturing expenses for chemical producers who rely on silver‑based catalysts. A softer silver price environment can therefore lower raw‑material costs, easing pressure on margins and giving chemical manufacturers more flexibility in pricing their products or reinvesting savings into growth, innovation, and capacity expansion

Conclusion

The sharp fall in silver prices, while reflecting market volatility, benefits sectors that rely on the metal. Electronics, automotive, solar, and jewellery industries can lower production costs, potentially boosting demand and profitability. This shift may also drive capital toward sectors gaining from cheaper silver, even as the metal’s industrial and investment roles continue to evolve.

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