Silver - What’s Happening in the Market?

Silver is unique in that it is both an industrial commodity, consumer product and an investment vehicle.  As such, its price is subject to market forces and is watched with interest by a variety of industries, consumers and investors. Currently, prices are being kept relatively low compared to some levels seen in the previous 18 months, largely because economies are still struggling and there is more supply than demand.

In considering the availability of silver, it may not be generally known that while ¾ of the supply comes from primary mine sources, the remaining ¼ is recovered from scrap refining. While both contribute to the silver supply stream, silver sourced from primary mines often is a by-product of base metal mining, such as copper. Silver sourced from scrap supply is generally impacted by market conditions. High prices typically create environments for consumers to make their scrap jewelry and flatware available for reclaim in exchange for cash.

Another key driver that is affecting silver demand is a softening demand by the solar market. Part of the reason is that many tax incentives ("feed in tariffs") have expired, and with the relatively low cost of natural gas, the climate has not been favorable for the solar industry to flourish. Since silver is a key component in crystalline silicon solar cells, any reduction in solar cell programs directly impacts silver demand.

Currently, many analysts predict silver may trade at or near its existing price levels through the end of the year. Their prediction is subject to any volatility or upward excursions resulting from further uncertainties in the EU and US debt situation, which in the recent past has contributed to higher prices.

At Materion, we pay close attention to silver price trends.  Since we supply a variety of silver-based products, cost is of concern as it impacts both us and our customers. Among our products that contain silver are: thin film sputter targets, braze alloys, contact alloys, silver sheet and wire used in the fabrication of jewelry, catalysts and silver grain. If you have any questions about our products or precious metal recovery services, please contact: Matthew.Waz@Materion.com.