Pump & Dump:- Silver?

[Mega]

Silver no longer the poor man’s gold as solar demand surges

New industrial uses for the precious metal could result in demand surging

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Silver is back in demand Photo: BLOOMBERG









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By Andrew Critchlow, Commodities editor

6:00AM BST 11 May 2015
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4 Comments


Silver has been mined for thousands of years. But for most of the 20th century it was the poor man’s precious metal, its value eclipsed by the enduring lure of gold.


The first big revolution in silver came in 1492 with the discovery of the New World, which opened up mining of the metal on a scale not previously seen. In the centuries that followed Hernán Cortés and the conquistadors’ destruction of the Aztecs, Peru, Bolivia and Mexico accounted for three-quarters of all world production and trade in the metal.


Today, more than 877m ounces of silver are mined annually and the metal is increasingly being employed in new industrial processes. A major catalyst for demand over the next decade will be in the production of solar energy.


Silver is a key component in crystalline silicon photovoltaic (PV) cells. According to IHS, demand for solar power is set to increase by 30pc to 57 gigawatts of electricity in 2015. China alone is expected to install something in the region of 17 gigawatts of solar capacity by the end of the year, creating huge potential demand for silver.


The majority of PV cells use silver paste in their construction and that industry alone is expected to account for 70m ounces of supply through to the beginning of 2016. Silver demand for the PV industry grew by about 7pc last year and that rate of growth is expected to increase over the next decade. Despite the bright long-term demand picture for silver, prices for the metal have slumped over the past three years from an average of $61 per ounce to just under $17 per ounce. A major cause of this drastic drop has been China, which is the world’s major industrial user. Like all commodities which depend on Chinese factories, silver has suffered.


_{Solar industry is creating demand for silver}
According to the latest World Silver Survey published by the Silver Institute and ThomsonReuters: “A combination of a slowdown in Chinese growth, a move away from commodities as an asset class, a stronger US dollar, and a challenging year for most precious metals in general, led to a lower average annual silver price.”

But long-term prospects could improve should a binding agreement be reached among major nations in Paris this year on climate change.

Such a deal would result in already strong demand for PV cells increasing further as major developing economies such as India and China increase the contribution that solar makes to their overall power generation network. A bigger problem than demand could be future supply. After years of growth in supply to meet this new demand for renewable energy, silver production is expected to stall this year as part of a wider slowdown among commodities.

Silver mine production grew by just 5pc to 877.5m ounces last year, according to the ThomsonReuters survey. “This growth is attributable to stronger output from the primary silver and copper sectors, new projects that came online last year and significant production gains in Central and South America,” the report said.

Primary silver mine production grew by 8pc and accounted for 31pc of global silver mine supply. The report said that Mexico was the world’s leading silver producer, followed by Peru, China, Australia and Chile.

However, analysts fear that a lack of investment by silver miners could see production plateau over the next few years at a time when demand from the fast-growing solar power industry is expected to pick up rapidly. According to the report, total physical silver demand hit 1.07bn ounces last year, the fourth highest level recorded since 1990. This was a 4pc decline from the 2013.
“A main factor in the decrease in physical demand was a fall in coin and bar demand from 2013, which had been a record year,” said the report.

Of course, silver will always be second to gold in the eyes of precious metals investors. But like its cousin, copper, it is a commodity that will grow dramatically in importance as the world searches for new sources of renewable energy.

[lektrode]

Re: Pump & Dump:- Silver?

Silver no longer the poor man’s gold as solar demand surges

New industrial uses for the precious metal could result in demand surging
By Andrew Critchlow, Commodities editor....

what - he just get back from the s of france (holidaze) - or what?

somewhat old news, eh?

[santafe2]

Re: Pump & Dump:- Silver?

Silver no longer the poor man’s gold as solar demand surges

Today, more than 877m ounces of silver are mined annually...

....The majority of PV cells use silver paste in their construction and that industry alone is expected to account for 70m ounces of supply through to the beginning of 2016.

Am I missing something here? PV uses 8% of supply and most of silver supply goes into coins and bullion. Feels like one of the hundreds of Ted Butler stories over the last 20 years.

[Southernguy]

Re: Pump & Dump:- Silver?

Found this on use of silver in PV industry. My conclusion: Solar PV is set to experience exponential growth for several years. So far silver seems to be a critical part of such development. Silver production seems to have peaked.
On the other way: other PV technology may be developed that does not need silver to work.
Long trend of silver price seems to me very difficult to go down. Silver, at around $535/kilo and 10490 kg/m3 makes attractive source of storage value. 1 million dollars is a 0,56 m cube.

10/21/2014 @ 1:45PM 4.291 views

Trends In Silver Demand By The Solar Photovoltaic Industry

Trefis Team , Contributor
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Silver and gold are compared to each other as both metals are viewed by investors as inflation hedges and safe haven investments. However, in addition to its characteristic as a safe haven investment, silver is widely used in industrial applications. It is used in the manufacture of semiconductors, solar photovoltaic cells and batteries, in the fabrication of jewelry, in photography and has a variety of applications in nanotechnology. With the rapid adoption of solar energy across the world, the demand for silver from the solar photovoltaic industry is expected to rise rapidly. In this article, we will take a closer look at the trends in the demand for silver by the solar PV industry.
How is Silver Used in Solar PV Cells
Silver has the highest electrical and thermal conductivity of all metals. This property of silver makes it an important constituent of solar cells. It is used in the form of silver paste, which is used to conduct electricity out of solar cells. Approximately 20 grams of silver are used in each crystalline silicon solar panel, which accounts for around 85% of the total market. Roughly 80 metric tons of silver or approximately 2.8 million ounces of silver are needed to generate approximately 1 Gigawatt of solar power.

Growth in Installed Solar PV Capacity
Globally, installed solar capacity stood at 139 GW at the end of 2013. Installed solar capacity has risen exponentially from a paltry 1.3 GW in 2000. Most of this growth in installed capacity in the past has come from Europe, particularly Germany, with favorable government policies facilitating the incorporation of a greater share of renewable energy into the country’s energy mix. Europe accounted for around 75% of global installed solar PV capacity in 2010. However, the pace of new installed capacity in Europe is expected slow down due to a reduction in incentives for PV installations in some major markets, such as Germany.
In recent years, China has made a push for greater PV installation. Chinese installed solar capacity has increased from 0.8 GW in 2010 to around 18.6GW in 2013. China leads the way in terms of additions to installed PV capacity in 2013, with the installation of 11.3 GW of grid-connected solar PV capacity. This was followed by Japan, the U.S. and Germany with 6.9 GW, 4.75 GW and 3.3 GW in additions to their installed solar capacity, respectively. Installed solar capacity is expected to grow by 20% this year or around 44.5 GW. China, Japan and the U.S. will be lead the way in terms of newly installed solar capacity, with around 12GW, 10.5 GW and 6 GW of additions to installed solar capacity, respectively.
The growth in installed solar PV capacity will be driven by China in the years to come. China is making a concerted effort to reduce its dependence on coal as a source of energy. The country is targeting 70 GW in installed solar capacity by 2017, as compared to 18.6 GW in 2013. Thus, China’s thrust on solar energy will provide the impetus for growth in solar PV capacity additions.
As per European Photovoltaic Industry Association estimates, by 2018, cumulative installed PV capacity will grow to 430 GW in an optimistic scenario and 321 GW in a pessimistic scenario. The incremental PV capacity addition in 2018 is expected to be 69 GW in the optimistic scenario and 39 GW in the pessimistic scenario. The risks to growth in installed PV capacity that will determine which scenario materializes are discussed later in the article. If we consider an intermediate scenario where installed capacity grows to about 375 GW by 2018, it represents a compounded annual growth rate of about 22% from the 139 GW in installed solar capacity in 2013. This will correspond to roughly 54 GW in incremental solar PV capacity addition in 2018.
Silver Demand from PV industry
The sharp growth forecast for installed PV capacity bodes well for silver demand by the PV industry. If we assume that over the next five years, crystalline solar silicon panels will continue to account for roughly 85% of the market, then these will account for approximately 38 GW in installed capacity in 2014 and around 46 GW in installed capacity in 2018.
We will estimate the demand for silver from the PV industry under the simplifying assumption that solar panels for incremental solar PV capacity additions are manufactured in the same year in which they are installed. Taking into account that roughly 2.8 million ounces of silver are required to generate 1 GW of solar power, the demand for silver translates into roughly 106 million ounces and 151 million ounces in 2014 and 2018 respectively. To put this into perspective, global silver mine production is expected to be roughly 800 million ounces and 750 million ounces in 2014 and 2018 respectively. Mine production accounted for roughly 75% of silver supply in 2012. If we assume that this ratio holds till 2018, overall silver supply will stand at roughly 1.07 billion ounces and 1 billion ounces in 2014 and 2018 respectively. Assuming a balanced market in which supply matches demand, the demand for silver from the solar PV industry will rise from 10% of the total demand for silver in 2014 to around 15% in 2018.
Risks and Opportunities
The pace of adoption of solar energy and consequently demand for silver from the PV industry, is contingent upon a number of factors. These include policy support for solar energy, competitiveness of solar power versus conventional sources of electricity generation and the price of silver itself.
Price decreases through technological advancement and rising costs of electricity in Europe have made solar power more competitive than before vis-a-vis conventional sources of electricity. However, this is contingent upon policy support for solar power. For example, in Germany, which accounted for the largest share of global installed solar capacity in 2013 at 26%, the cost of generating solar power stood at 0.078-0.142 Euros per Kilowatt hour (kWh). This compares favorably with the average end-customer price in Germany, which stood at Euro 0.289/kWh in 2013. However, due to lowering of policy support with the imposition of a tax on clean energy plants, incremental addition to installed capacity is expected to fall to 3.3 GW in 2014 from roughly 7.4-7.6 GW in each of the previous three years. Lowering of policy support in Germany made solar power less attractive as compared to conventional sources of energy. Thus, favorable government policy is a must in order to accelerate the adoption of solar power at a global level.
The cost of silver itself is another major factor that will determine the cost of generating solar power. Silver is currently trading at levels of around $18 per ounce. A significant increase in the price of the metal may raise the costs of producing solar panels and solar power, thereby retarding the pace of the adoption of solar power. In addition, any technological changes that reduce the amount of silver used in producing a unit of solar power, may also reduce the demand for silver by the PV industry. These variables would determine the pace of growth in installed solar capacity between the optimistic and pessimistic scenarios discussed previously, and consequently, the demand for silver by the solar PV industry.
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[santafe2]

Re: Pump & Dump:- Silver?

If we assume that over the next five years, crystalline solar silicon panels will continue to account for roughly 85% of the market, then these will account for approximately 38 GW in installed capacity in 2014 and around 46 GW in installed capacity in 2018.

Assuming a balanced market in which supply matches demand, the demand for silver from the solar PV industry will rise from 10% of the total demand for silver in 2014 to around 15% in 2018.

This research is unfortunately what generally passes as expert opinion in our Google enabled world...I can look it up, drop it in a spreadsheet and do the maths so it must be true. The above two sentences are typical of research contained in this and many other investment theses. So let's analyze it.

The author's growth estimates for solar PV are probably correct given the current natural gas boom. It represents 5% compound growth each year over 5 years which he extrapolates to a 50% growth in silver capacity use over 5 years. Possible of course, but he's assuming the solar industry will make no research investments over that time to A) lower the silver requirement in the paste used for connectivity and B) will not continue to increase the power density of each solar cell.

The silver paste is a key component in the leads that connect cells in a panel. A standard 60 cell 200 watt solar panel from 2005 and a 60 cell 300 watt solar panel from 2014 use the same number of connections. A gigawatt of solar in 2014 required 1/3 less silver without any improvement in the silver leads. This process of improvement in cell power density will continue into the future.

In 2011 when silver peaked at $47 research was heavily funded to decrease the amount of silver required in the leads that connect cells. The cost per panel was about $35 at the peak, it's more like $11 today. If silver again moves into the $50 range, research in this area will increase and the amount of silver required per lead will drop dramatically.

We also have to believe that the market will care if solar begins to take an additional 5%. While I like silver as much as many others on iTulip, I find very unlikely that an additional 5% will create a tipping point.

[Southernguy]

Re: Pump & Dump:- Silver?

Thanks Santa for your insight.
Seems, however, that some market participants got the "pumping" meme these days.

[santafe2]

Re: Pump & Dump:- Silver?

Thanks Santa for your insight.
Seems, however, that some market participants got the "pumping" meme these days.

The silver perma-bull Ted Butler is the poster boy for silver conspiracies. These have always been lead by the evil silver shorting institution JPM. Here's a typical paragraph:

The U.S. Mint sold 783,500 Silver Eagles in just two days after going 4 or 5 days with no sales. Then the Mint reported a scant 50,000 additional coins sold over the next two days. This is precisely the erratic level of sales that indicates the presence of a big buyer. I can’t certify that the big buyer is JPMorgan, but everything I look at points to them.

Ted often uses mom's logic...because I said so.

The entirety of the latest installment of JPM the silver devil can be found here:
http://www.silverdoctors.com/ted-but...ul-in-history/

[astonas]

Re: Pump & Dump:- Silver?

I just wanted to chime in to concur with Santafe2:

In 2011 when silver peaked at $47 research was heavily funded to decrease the amount of silver required in the leads that connect cells. The cost per panel was about $35 at the peak, it's more like $11 today. If silver again moves into the $50 range, research in this area will increase and the amount of silver required per lead will drop dramatically.

Exactly right!

I just wanted to expand on this point by adding that the main reason silver is used in the first place (instead of other already available options like liquid-metal alloys) is largely that it is relatively cheap. If silver starts really soaring, not only could more efficient use of that metal be made, but alternative metal alloys and colloids would become economical as well.

That's because the physics of silver (which has a work function around 4.5eV) does not put it into any particularly special range for carrier extraction. Things like lead, copper, and iron fall in the same range.

Knowing this, we can see that the main reason it is used is the ease of putting it in a stable, conductive, solution that can accommodate a wide range of topography. But that too, is not particularly magical: colloidal solutions of many metals and stable semiconductors are developing at a pretty rapid pace these days. There are still cost barriers to using most of these at this moment, but not, in general, due to fundamental limitations. Even carbon-based solutions could eventually become viable!

So treating silver as an intrinsically necessary material for all future solar cells is simply a demonstration of the author's ignorance of the field of materials research.

This is entirely understandable from a financial reporter with no technical expertise, but unfortunately it also means his writing is entirely ignorable. The explanations santafe2 and I went through are not exactly closely-held secrets of the industry; it seems to me that the author decided background research was really more of an optional thing when writing this piece.