Silver demand is set to jump in 2022 as the commodity benefits from the growing green transformation.
According to the Silver Institute, silver demand is expected to reach a record high of 1.112 billion ounces in 2022, with industrial fabrication to be a key player in this, increasing its demand by 5 per cent this year.
Industrial fabrication is silver’s principal user, with the precious metal utilised in many electrical applications as it’s considered the best electrical and thermal conductor of all the metals.
Silver is used in electric vehicles (EVs) where between 25 and 50 grams of silver is needed per EV, while the commodity plays a critical role in the creation of solar panels.
Silver’s use in physical silver investments, comprising silver bar and bullion coin purchases, is forecast to reach a seven-year high in 2022, increasing by 13 per cent.
The commodity’s use in jewellery and silverware is expected to be another key driver of the metal, with demand in these applications set to increase by 11 per cent and 21 per cent respectively in 2022.
“In 2022, the silver market will build on the strong foundation set last year, when silver demand gained in all key sectors. Continuing the trend from 2021, this year’s upside will be broad-based, with gains expected from most key demand components,” the Silver Institute stated.
“Ongoing improvements in the global economy will give silver industrial applications an additional boost, mitigating near-term headwinds from supply chain bottlenecks and the challenges in certain regions from the ongoing COVID pandemic.
“The outlook for silver’s use in the photovoltaic (PV) industry remains bright. Government commitments to carbon neutrality have resulted in a rapid expansion of green energy projects.
“As a result, even with ongoing efforts to reduce silver loadings, record PV installations are expected to lift silver demand in this segment to an all-time high in 2022.”
It comes as United Kingdom-based company Alien Metals works towards restarting its Elizabeth Hill silver mine near Karratha in Western Australia.
The mine has been mothballed since 2000, when previous joint venture partners East Coast Minerals and Legend Mining fell out during low silver prices.
The mine has produced more than one million ounces of silver at an average grade of 2195 grams per tonne, including one 180-kilogram silver nugget.
In January, Alien made a significant discovery at the historic mine, returning a hit of 9.7 metres of mineralisation measuring 8326 grams of silver per tonne (g/t) from 15 metres of depth. This was part of a 22-hole, 1991-metre drill program.