Overall, global industrial demand for silver grew around 4%, from 5,768 million ounces in 2016, to 599 million last year, according to the World Silver Survey 2018, produced by the GFMS Team at Thomson Reuters on behalf of the Silver Institute.
Last year’s performance, according to the survey, was mainly due to the record growth of the PV industry, which pushed demand for silver as a component of silver pastes for the manufacturing of solar cells, from 79.3 million ounces in 2016, to 94.1 million ounces in 2017 – a year-on-year growth of around 19%.
In comparison, in 2014 and 2015, demand for silver in the PV industry reached 51.8 million ounces and 59.2 million ounces, respectively.
“China was again the main contributor to the growth, accounting for more than a half of the world’s new solar panel installations last year, while Europe and India also enjoyed healthy gains,” the survey’s authors wrote.
The survey also stated that silver powder used in the solar industry is now becoming increasingly commoditized, and that this is having detrimental effects on producers’ margins. “Volumes for silver used in this sector are still rising but a lot of it is attributed to increased installations,” it said.
As for the Chinese solar industry, the survey reveals that last year, domestic production accounted for 20% of frontside silver paste demand, and completely covered demand for backside silver pastes.
“We believe the market share of domestically produced frontside silver paste will continue to increase this year, as the quality (mainly in regards to consistency challenges) continues to improve,” GFMS said.
The survey further reveals that, last year, 15 tons of silver paste were imported by PV cell manufacturers in India, as silver used in the solar industry is still nonexistent in the country.
Overall, the survey foundthat approximately 76% of silver demand in the PV industry last year was used in frontside pastes, while the remaining 24% was used in backside pastes. In the prior year, these percentages stood at 81% and 19%, respectively.
Production-weighted average silver loadings per cell remained flat at around 0.13 grams in 2017. “In the long-term, the improvement of efficiency rate will reduce the use of silver required to produce one watt of electricity, but is unlikely to have a noticeable effect in the short term due to the strong momentum in demand for solar energy and the time required to adopt the new technology in the commercial usage,” GFMS analysts said.