Home > News > About A-Best Jewelry >
Home > News > About A-Best Jewelry > Industrial Demand: A Strong Support for Silver

Industrial Demand: A Strong Support for Silver

Posted on 2012-11-05, By A-Best Staff
By Michelle Smith–Exclusive to Silver Investing News

Silver Industrial Demand Outlook Price

Investment demand for silver tends to attract the most spotlight because it can create extreme price volatility. Meanwhile, fabrication demand tends to receive less consideration though it is playing an increasingly important role in supporting the silver market. This is especially true with regards to industrial usage. While investment demand is subject to the whims of human behavior, the outlook for industrial demand is considered to be securely positive over the long term.

A report released by the Silver Institute forecasted that industrial fabrication would increase by 37 percent between 2010 and 2015, meaning a potential increase from approximately 488 million ounces (m/oz) to 666 m/oz.

Fabrication of silver often brings to mind coins, jewelry, and cutlery. The masses, including silver investors, probably do not realize how widespread the use of silver really is.

Industrial uses of silver

In 2010, industrial demand for silver increased nearly 21 percent. This continues to be a positive fundamental because there are both established and emerging applications for the metal. Electrical and electronic applications compose the largest segment.

In comparison to other metals, silver is the best electrical and thermal conductor. It is used to make items such as contacts, circuit breakers, switches, fuses, and is therefore found in motors, appliances, electronics, and automobiles.

The photovoltaic (PV) industry is heavily reliant on the metal to produce solar panels, which has proved to be a fast growing application. The metal has seen strong demand from brazing and soldering sectors and is commonly used as a catalyst to produce chemicals such as ethylene oxide. Due to its excellent reflective properties, silver is also used for mirrors, coatings and reflective surfaces.

Then, there is an array of industrial applications for which silver usage is either growing or has strong growth potential. This includes batteries, radio frequency identification tags, and water purification systems. Given the antiseptic and antibacterial properties of the metal, it is currently used for medical and hygienic applications including purifying sprays, wound dressings, and surgical gowns, a sector which could prove bullish for demand in the future.

Support for strong industrial demand

Optimism for strong industrial demand stems from a growth trend that has been witnessed over the past two decades and from the reality that silver is virtually irreplaceable in most applications for which it is used. These include products that are increasingly desired among the growing middle classes in emerging nations and which are entrenched as necessities in the developed world.

Print  Close  Top