Silver is down. But surely not out. Its prices have been moving in the range of $32-36 per ounce (about Rs 50,000 to Rs 55,000 per kg) after crashing from $50 per ounce ( Rs 75,000 per kg; 1 troy ounce equals 31.1 grams). But, according to experts, the precious metal would continue to be a good investment bet due to its widespread use in scores of industries.
Estimates suggest that a little over half of the demand for silver comes from industrial uses. What makes silver a great metal for industrial use is that it is the best conductor of electricity, the best heat transfer agent, the best reflector of light, a marvellous lubricant and a versatile catalyst and alloy. Despite the fall in demand from traditional areas of silver use, more demand is expected to come from several other industrial uses of silver.
Solar panels needed for solar power use silver. As far as industrial uses of silver go, the solar energy sector is showing the most growth potential, says Devendra Nevgi , founder and principal partner, Delta Global Partners. A study titled The Future of Silver Demand, carried out by GFMS, a precious metals, base metals and steel research consultancy, says: “Over the last decade, this sector’s offtake has soared from less than 2 million ounces to about 50 million ounces in 2010.
This year, the demand is expected to reach nearly 70 million ounces, an increase of 40% year-on-year.”David Morgan, editor of The Morgan Report and who runs the website www.silver-investor.com, says: “China has been growing its solar energy base around 100% a year since 2003. India plans to increase its solar output to 20 gigawatts by 2020, starting from basically nothing currently. China continues to project massive growth from the current 5.5 GW capacity to 30 GW by 2020,” he says.
“The US has forecast a similar amount, perhaps 30 GW by 2020. On a worldwide basis, the generating capacity by 2020 is projected to be 20 to 40 times the amount of current solar capacity.” In fact, with the tsunami in Japan bringing the world on the brink of a nuclear disaster, the demand for solar power is expected to go up further. This will fuel the demand for silver. Morgan feels the “solar demand could reach 130 million ounces per year around 2014 and continue through 2020″. The silver production in 2010 was about 750 million ounces.
MEDICAL USES OF SILVER
This is another area where the demand for silver is expected to touch 100 million ounces by 2020, says Morgan. “Silver-based cleaners and bandages are being increasingly used throughout the world,” he says. Silver is also used in catheters, pacemakers, valves, feeding tubes as well as medical appliances inserted in the human body.
Silver has tremendous anti-bacterial qualities. Jeff Nielson, editor of www.bullionbullscanadaver .com explains: “My personal favourite industrial application for silver is as an anti-microbial agent. There are literally too many applications of silver making use of this property for me to even list them all.” Silver is used in anti-bacterial sportswear to reduce odour, anti-bacterial clothing for soldiers and medical personnel to reduce infections, and in food packaging, anti-bacterial upholstery, etc.