Resource World Magazine

8 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 5 Silver is sometimes viewed as the "poor man's gold", a less-expensive asset that follows the yellow metal's slipstream. This does silver a great disservice not only from an investment standpoint but also because the metal is one of the most versatile metals. While we are all familiar with silver coins and bars for investment, industrial uses account for around 60% of silver's demand, with global industrial offtake reaching almost 595 million ounces for 2014, according to GFMS Thomson Reuters (GFMS) and the Silver Institute in the World Silver Survey 2015. They also estimate 2% growth for silver consumed for industrial applications across 2015. "Silver is contained in many of the items we see and use on a daily basis, including automobiles, computers, tablets and smart- phones," Silver Institute executive director Michael DiRienzo told Resource World. Silver's strength in the electrical and electronics space is rooted in the metal's excellent conductivity; manufacturers prefer it for switches and contacts over cheaper but less-efficient alternatives. Demand for silver in electronics accounted for almost 264 million ounces in 2014. However, GFMS predicts a decline in silver uptake inside computers as families switch to tablets that utilize less of the pre- cious metal. "Computer sales are expected to decline for the next five years or so, sim- ply because a household today has one or two tablets rather than two or three desk- tops, something that was more common from the late 1990s into the mid-2000s," GFMS senior precious metals analyst Erica Rannestad told Resource World. Support for silver in electronics will come from increased global sales of smart- phones, albeit with some uptake lost on a per unit basis due to the ongoing miniatur- ization of components. At the time of writing it was still too early to assess the possible impact on sil- ver of China's equity woes from June into September. Here concerns are tied to the broader manufacturing picture, a use- ful gauge for assessing silver's industrial outlook. "But some of the emerging uses of silver are doing so well that this [situa- tion] is being offset right now," Rannestad stressed. This is particularly true of the photo- voltaic (PV) sector, which utilizes silver as the conductive metal in the paste that coats solar panel cells. The sector's silver uptake reached 59.9 million ounces in 2014, up 7% from 2013, and accounted for about 10% of silver demand in industrial fabrication. The Silver Institute and GFMS estimate uptake will rise by 8% across 2015 to reach a total 65 million ounces silver. In addition, the glut in solar panel sup- ply widely reported a few years ago has been worked through, while the level of thrifting – where manufacturers reduce the amount of silver utilized in the cell paste – has slowed on silver's lower prices. Some of the highest levels of installa- tion growth have come from the US, while support for solar power remains strong in Europe, bolstered by favourable subsidies packages. China and India have also con- tinued to boost their solar footprints, with Rannestad and DiRienzo both noting that Silver's many uses – more than meets the eye by Simon Rees

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