New Silver Applications as Physical Supply Heads to Deficit

The demand for physical silver rose through the first half of 2015.

The need for silver in manufacturing, its expanding use in health applications, and increased demand for silver jewelry all helped drive the surge.

According to GFMS Thomson Reuters, the precious metals consultancy, imports of silver into the United States jumped 11% through the end of May, as reported by the Silver Institute.

The United States is the largest importer of silver jewelry, measured in dollar terms, and this demand impacts silver trade across Asia. US imports from Thailand were up 18.5% through the end of May while China showed an increase of 14% in the same period. GFMS estimates that silver jewelry will grow 5% worldwide in 2015.”

Industrial use drove the surging demand, accounting for about 60% of increase. GFMS estimates a 2% growth rate in industrial applications of silver over the next year, driven by increasing solar panel production.

In the renewable energy industry sector, the demand for silver by solar panel producers is expected to increase 8% to 65 million ounces this year. The rise reflects increased solar cell production and a higher number of installations. The increase is pegged to the US, which saw a 76% increase in solar installations in the first quarter of 2015 compared to the same period last year. China and India both have aggressive solar installation plans and are expected to help drive projected growth as well.”

Silver demand by ethylene oxide producers is also predicted to jump. Producers of plastics, solvents, detergents and a broad range of organic chemicals utilize the chemical. According to the GFMS, demand for silver by ethylene oxide producers will increase to 8.6 million ounces in 2015, a 61% increase over 2014.

You can find silver in all kinds of places you might not expect. For example, Corning has developed a silver-based Antimicrobial Gorilla Glass. The glass is extremely hard and scratch resistant, and with the new silver base, resists microbial growth, according to James R. Steiner, Senior Vice President and General Manager of Corning specialty Materials.

Corning’s Antibacterial Gorilla Glass inhibits the growth of algae, mold, mildew, fungi and bacteria because of its built-in antimicrobial property, which is intrinsic to the glass and effective for the lifetime of a device. This innovation combines best-in-class antimicrobial function without compromising Gorilla Glass properties.” 

The Axon smartphone, manufactured by China’s Shenzhen-based company ZTE reportedly uses the new glass. And don’t forget – silver is being used inside these phones as well to create high-quality electrical connections.

Researchers in the health and medical fields continue to find new applications for silver’s anti-bacterial properties.

Scientists at Egypt’s Alexandria University have developed dressings made from nanofibers composed of cellulose acetate spun with silver nanoparticles to help heal wounds in diabetics.

In São Carlos, Brazil, a dairy company has increased the shelf-life of its milk in from 7 to 15 days by incorporating silver-based microparticles into the plastic bottles. Nanox CEO Luiz Pagotto Simões said it was just a matter of applying silver’s known properties to a new application.

We already knew that using antimicrobial silver in rigid or flexible plastic food packaging improves conservation and extends shelf life. We tested it in the polyethylene used to bottle grade A fresh milk in Brazil. The result was that we more than doubled the product’s shelf life solely by adding the material to the packaging, without mixing any additives into the milk.”

The increasing silver demand is expected to put the market in a deficit this year, according to the Silver Institute.

The silver market is expected to be in a deficit of 57.7 million ounces in 2015 as supply contracts and physical demand grows. This would mark the third consecutive year that the market is in a physical deficit. When the market experiences an annual shortfall from mine supply, users must drawdown on above ground stocks, thereby tightening available supply.”

The increasing demand for silver driven by industrial applications is just one factor making silver a good investment opportunity. To learn more, get Peter Schiff’s special report, A Powerful Case for Silver. Download it free HERE.

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!