Industrial Use and Demand for Silver
When comparing the various uses of gold, silver, platinum and palladium, silver may have the most industrial uses and possibilities. Silver can be used in various industrial applications across a very wide range of industries. This puts silver in a somewhat unique position among the precious metals complex. When one thinks of gold, for example, two words normally come to mind: jewelry and investment. Silver, on the other hand, is widely considered to be an investment vehicle and an industrial metal. Silver, therefore, has the potential to see growing demand and potentially higher prices based on investment demand as well as industrial demand. During times of strong economic conditions, silver may see investment demand falling while industrial demand is rising. Demand for silver is well-diversified among many different sources, making the metal attractive for investment purposes as it can potentially flourish in both good and not good economic times.
Demand for silver comes from three distinct sources: Investment demand, industrial demand and jewelry demand. While silver may have hundreds or even thousands of potential applications, here we will highlight just a few to give you an idea of just how useful the white metal really is.
Silver has been widely used in jewelry for hundreds of years now. The most widely used silver for jewelry today is sterling silver. Sterling silver is combined with additional alloys to make the metal harder. Jewelry accounts for a nice piece of overall silver demand, and is forecast to be in the 235-265 million ounce range this year.
Formaldehyde and Ethylene Oxide
Silver is a necessary component in the production of other products. Both formaldehyde and ethylene oxide requite silver to be produced, as a matter of fact more than 700 tons of silver are used annually in the production of these critical compounds. These compounds are used in a large number of products. Flexible plastics, molded plastics and solid plastics all require these compounds. Modern day plastics have thousands of uses, and are a big part of life on this planet. A few of the products that silver makes possible are:
- plastic toys
- electrical connector housings
- plywood and particle board
- various appliance components
Silver paste is used in the manufacturing of crystalline silicone photovoltaic cells. These cells are the most common type of solar cell and are used to power homes and even businesses. Use of these solar cells continues to spread around the globe, and various countries are looking to employ more of this type of power generation as it is relatively simple and pollution-free.
Silver in Automobiles
Over 36 million ounces of silver are put into cars each year. Silver is a key component in anti-freeze production, which keeps our cars running in the winter. Today’s auto electronics utilize silver coated contacts for ease of electronic signal transmission. These silver contacts facilitate everything in your car from closing the moon roof to pressing a button to open the trunk. Silver-ceramic wires contained in the glass on the rear windshield allow us to melt snow and ice. Without silver, many features of the modern automobile would not be possible.
Silver in Healing
Silver also has many uses in medicine. The metal has very strong anti-bacterial properties that help heal wounds faster. Because of this, silver compounds are often found in burn creams and contained in bandages. The healing properties of silver have been known for hundreds and perhaps even thousands of years. Modern medical device companies are finding more and more uses for this fascinating metal. Some of the largest medical equipment and supply companies are now producing their own brands of bandages and other products containing silver.
In addition to its healing properties, silver also hates germs. The white metal can help prevent the spread of germs making it useful in hospitals and doctors’ offices. Medical tools and devices can be embedded with silver to help stop the spread of germs in their tracks. Hospitals are now even embedding silver in their furniture to assist with germ prevention.
Even in the digital age, silver still plays a vital role in photography. Many professional photographers, for example, still prefer to take pictures the old school way. Silver is a key component in the production of photo negatives. A large amount of some of the best photography ever taken would not be possible without silver. Professional photographers as well as motion picture producers still make use of this type of photography today, and their preference for it will not likely dissipate even as digital imaging becomes more advanced.
In addition to photography, x-rays make use of silver as well. Like the photography industry, many providers of x-ray services have gone digital. Silver in x-ray technology has, however, proven to be extremely reliable over many years and is still widely used today in many parts of the world. Silver x-ray technology has a very successful track record and is significantly less expensive than other methods.
With a higher power-to-weight ratio than comparable batteries, the silver oxide battery is slowly but surely replacing the lithium ion battery. In addition to its superior power, the silver oxide battery has less of an impact on the environment. The battery in your watch or in your cell phone is likely a silver-oxide battery. As environmental concerns grow, and as more and more everyday devices require batteries with longer life and more power, silver oxide batteries will be found in more and more products from watches to toys to laptop computers.
Silver is known for its ability to conduct electricity. Because electrical transmissions are able to travel through silver quickly and with ease, silver is used in many types of electronic circuitry and components. Some current uses include:
- computer keyboards
- Plasma screens
- Light switches
- Printed circuit boards
Because of its conductivity, silver is the metal of choice for all types of electronic switches and can be put through millions of on/off cycles.
Current Overall Demand
The U.S. Geological Survey recently calculated the amount of silver demand in the U.S based on use. Here is what they came up with:
- 35 percent of silver is used for electronics
- 25 percent is used for coin and medal production
- 24 percent is used in hundreds of other applications such as medicine, soldering and chemical production
- 10 percent is used in photography
- 6 percent is used in jewelry and silverware
Silver has very far-reaching potential applications, and those applications grow by the day. As such, demand for silver will likely continue to increase as developing markets grow and become more modernized.
According to The Silver Institute, total demand for physical silver reached 1081 million ounces last year. The Silver Institute has also forecast a 27 percent growth rate for silver through 2018, and has attributed this anticipated growth in demand to the electronics sector.
As a precious metal with limited supply and very valuable investment and industrial uses, the upside potential of the white metal is considerable. The uses outlined here barely scratch the surface.