Silver set to soar on demand from healthcare, clean energy, water purification

(July 15, 2011 - by Robin Bromby, The Australian)

SILVER demand is expected to climb by 6600 tonnes a year over the next nine years as the white metal becomes important to an increasing range of new technologies.

ABN Amro and VM Group, in their latest silver report, say silver demand is rising on demand from sectors involved in security, healthcare, clean energy and water purification.

The biggest growth will be in solar panels, where crystalline silicon solar cells contain silver. The use of silver in these cells is expected to rise from 570t last year to 2000t in 2020.

India plans to increase its solar capacity from virtually zero now to 20 gigawatts nine years from now; China is looking to boost solar from 5gW now 30gW; and the US is aiming to become the world leader in installed solar capacity.

The report says demand for silver is also promising regarding radio frequency identification tags, with a forecast sixfold rise in silver use to 367t a year by 2020. These tags are rapidly taking over from the bar-code system. China is now using the technology for ID cards for its populace while EU passports also include the tags.

In the longer term, the manufacture of wood preservatives could become a significant market for silver. In healthcare, silver is used as a biocide - an agent capable of destroying organisms - in wound care, catheters, pacemakers, heart valves and feeding tubes. By 2020, ABN Amro sees 600t a year of silver going into the health market.

Clean water is another big market, with silver a component of water purifiers in helping to remove bacteria, chlorine, lead and particulates. Annual consumption of silver in this sector should reach 1400 tonnes by 2020.