Silver was the most important trading commodity in the 16th century, making an inestimable contribution to the power and wealth of Portugal, Spain and the Netherlands. At the time, mines in Peru, Bolivia and Mexico produced three-quarters of world production.
Over time, it was reduced to being the poor man’s precious metal as gold eclipsed silver in value.
New industrial techniques today are creating a rising demand for silver and analysts believe that the production of solar energy will create further demand for the metal.
Solar power could increase by as much as 30% in the next few years, especially as China alone is expected to install swathes of new solar farms.
Silver is a key component in the photovoltaic cells used in the industry. Demand for silver jumped about 7% last year and observers believe the rate of growth could increase over the coming decade.
China is the world’s largest user of silver in industry, but the slowdown in its economy saw demand and prices fall over the last three years from about $61 an ounce to about $17.
Nevertheless, the political focus on the perils of climate change could promote greater solar use, particularly if a binding agreement is reached by major nations.
The already strong need for PV cells could rise higher as countries move more towards solar in their power generation networks.
Silver mine production grew by 5% to 877.5m ounces last year, according to a ThomsonReuters survey which noted that Mexico was the world’s leading silver producer, followed by Peru, China, Australia and Chile.
Analysts are wondering if output can meet an increased demand
According to the report, total physical silver demand was for 1.07bn ounces last year, the fourth highest level recorded since 1990. This was a 4% drop from 2013.
“A main factor in the decrease in physical demand was a fall in coin and bar demand from 2013, which had been a record year,” said the report.
