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Updated 19:58 08/05/21

Heraeus fear silver demand will tail off in 2018

By Liam Sheasby, News Editor

21 Jun 2018

German refiners Heraeus issued a statement on Monday highlighting a predicted drop in industrial demand for silver in the second half of 2018, with Chinese photovoltaic solar panel installations at the heart of the demand drop.

According to data from the Silver Institute in Washington, USA, solar cell production in 2017 was roughly 9% of the total global demand for silver, which equated to 94.1 million ounces of silver. The Heraeus report estimates that the drop in China’s demand for silver could be around 10 million ounces – outweighing the rest of the renewable energy industry’s steadily increasing demand and ultimately halting any continued rise in the price of silver.

A solar installation near Golmud city, in the Qinghai Province, China

The Heraeus report states that China’s reduced cap for solar panel subsidies, plus the ongoing trade dispute between the US and China, are both hurting the renewable energy industries and their demand for silver.

China is both the largest manufacturer of solar cells and the largest end user of them. The nation installed 53 gigawatts of new solar energy storage capacity in 2017 but the Chinese government changed their tariffs and subsidies for solar panel development, as well as capping the capacity level of start-up sites at 10GW. The Chinese National Energy Administration reported in late April that 7.68 GW had been reached between January and March. It is expected that the 10GW mark will be reached soon.

A spokesperson from Heraeus said: “This combination of measures means that there could be a sharp slowdown in photovoltaic installations in China in the second half of the year, negatively impacting silver demand.

“However, with the new rules cutting installations in China, and disruption to installations in the US caused by the 30% import tariff imposed by Donald Trump in January, global solar installations are likely to decline in 2018.”

The 45th President of the United States of America - Donald John Trump

The trade war between the US and China is impacting a multitude of industries, but specifically steel, aluminium, solar panels, and washing machines. These are four areas that President Trump targeted due to what the US Government believed was unfair pricing or undervaluation from China (and South Korea) to attract consumers and businesses.

The price of silver is currently down 39p per ounce in the past week, up 78p in the past three months, and down 65p an ounce in the last year.

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