Silver miners bullish on demand
Industrial uses for silver increasing
Silver companies at this week’s Gold Forum Americas were optimistic about the price given widening deficits.
After a positive week, the spot silver price is trading at a three-month high of above US$31 an ounce.
Hecla Mining chair and interim CEO Cassie Boggs told the forum silver supply was sitting at around 1 billion ounces per year, while demand was 1.2Boz.
“More than half this demand is industrial because of silver’s use in electronics and industrial applications,” she said.
“The most notable growth aspect in silver demand is of course in the use of solar applications.”
Boggs said use in solar panels had grown at 17% per year for the past five years.
“We see this growth continuing. Those technologies are gaining market share,” she said.
According to Boggs, every gigawatt of solar installation needs 450,000oz of silver.
“I’m confident that silver’s best days are ahead of us with the increasing deficit in silver supply and demand and silver’s increasing importance to the energy transition,” she said.
First Majestic Silver CEO Keith Neumeyer presented immediately following Hecla and reiterated Boggs’ sentiment regarding silver.
“This deficit is increasing and won’t go backwards,” he said.
“It’s here to stay and where these ounces are coming from, who knows, but you’re seeing flat production.”
Neumeyer said silver mine production had peaked at 880 million ounces in 2016.
“Since then, the decline has persisted and I don’t see it turning around any time soon,” he said.
“At current prices the sector is not making the necessary investments.”
On Wednesday morning, Sun Silver executive director Gerard O’Donovan pointed out that 90% of photovoltaic cells for solar panels were manufactured in China.
Sun Silver has applied for US$60 million in grant funding and has appointed Wood to assist with studies into a potential silver paste plant in the US.
O’Donovan said there was evidence of major countries increasing purchases of physical silver.
“If you look at India, for example, they've been rapidly acquiring silver,” he said.
“I think in the last quarter, China has imported more silver than it has in recent times, so it's evident that there is stress on the physical as well.”