China to Continue Driving Silver
China will continue to be a major driver in the global silver market for the foreseeable future, fueled by continued industrial demand and silver mining activity, according to Prospects for the Chinese Silver Market, a report recently published by The Silver Institute.
China is not only the largest consumer of silver globally but the world’s third largest mine producer, the report noted. “Starting with supply, Chinese mine production has averaged 110 Moz over 2010-17… This puts China in a position to also be a key supplier of metal to a number of silver-hungry nations, most notably India. China is also a leading fabricator. During 2010-17, total Chinese fabrication averaged 153 Moz accounting for 18% of the global total.”
Examining specific demand sectors, the report noted: Photovoltaic: China’s consumption of silver for solar applications has been rising in recent years to an estimated 65 million ounces (Moz) in 2017. More than 70 percent of global solar panel production takes place in China, and local powder fabricators are only able to supply a portion of the essential powder and paste needed for manufacturing before relying on imported silver to
Fulfil the requirements.
Although policy changes will most likely see volumes decline modestly this year, the long-term uptrend is expected to resume in 2019, assisted by still sizable local installations and strong sales abroad. Electronic and Electrical growth across a wide range of end-use applications has and will continue to fortify demand.
Significant areas of growth include touch panels, light emitting diodes (LEDs) and equipment used in electricity generation. Chinese consumption of silver for electronic and electrical uses was estimated at 78 Moz in 2017 and is forecast to grow modestly this year.
Brazing Alloys & Solder brazing applications that rely on silver should experience further gains as China continues to focus on infrastructure development. Brazing alloys and solders accounted for 24 Moz in 2017. A wide range of end-use applications, including railway infrastructure development, increasing car sales, refrigeration and air conditioning should fuel this growth.
Jewelry & Silverware areas have suffered declines in China in recent years, with combined fabrication reaching 29 Moz in 2017. The main drivers of this have been changing consumer appetites and the impact of anti-corruption legislation on the gifting market. The report authors, however, believe the end of this downtrend is near.
In fact, silverware has already turned a corner, while silver jewelry in China is expected to return to positive growth from 2020 onwards. The report was researched and produced by Metals Focus, a precious metals consultancy based in London.
