the outlooK for silver industrial demand, november 2012
1. InTROdUCTIOn & ExECUTIVE SUMMaRy
Over the pst decde, silver industril dend hs enjoyed robust perfornce. at the turn of the illenniu worldindustril dend stood t 383.3 moz. This reected risingdend fro growing rnge of consuer products,but ws lso due to strong infrstructure spending.The bursting of the “dot-co” bubble in 2001 led to pronounced drop, lthough recovery phse quicklyeerged the following yer, rking the strt of period ofseven consecutive yers in which globl industril offtkegrew, to then record totl of 492.7 moz in 2008. Theextent of the recession-induced decline in 2009 eclipsedtht of 2001, but s severe s this outcoe ws, 2010not only sw industril dend register its lrgest oneyer gin, but lso new high of 499.6 moz. The strongperfornce fro the industril sector hs lso beencrucil in ters of offsetting structurl declines elsewherein the silver rket, nely in photogrphy nd silverwre.Together in 2000, t round 315 moz, these two segentsccounted for over one-third of globl silver fbriction,but by 2011 their contribution hd fllen to just 13%, or 112moz.eturning to lst yer, it would be isleding to suggestfro this perfornce tht the industril sector is entirelyiune to the globl econoic bckdrop, but in thecontext of the sluggish econoic recovery, it ws perhpssurprising tht lst yer produced fll of just little under4%. The losses were lrgely concentrted in the doinntelectricl & electronics sector, in prt becuse of declinein photovoltics.The 4% drop for the globl industril segent in 2011 lsohides soe quite vried intr-yer developents, nely strong rst hlf followed by shrp fll towrds end-yer.The uncertinty crried over into 2012 nd it ws ginstthis bckdrop tht the ilver nstitute coissionedThoson euters GFm to not only guge the underlyinghelth of the rket, but lso to deterine if we wouldsee repet of 2009’s rked downturn, or if in fct sufcient recovery would eerge during the ltter prt of2012 to counter the initil decline.elted to this nlysis, we hve lso produced nssessent of the silver content of nuber of keyconsuer nd industril products. This helps to quntifynother key eleent of the industril forecst, nelythe ipct of thrifting nd substitution. These twinthees hve gined soe iportnce in recent yers sindustril fbrictors hve contended with rising nd,t ties, voltile silver prices. Tht sid, the shift wyfro silver in the brzing industry is rgubly prt of longer ter trend, pre-dting recent price ction. asiilr rguent pplies to consuer electronics in prtbecuse of the trend towrds products with shortershelf-life. However, s the report sets out thrifting is lsogining oentu in soe key rket segents, suchs photovoltics. Tht sid, n iportnt liiting fctoris silver’s unique technicl properties nd, s we discussin the report, the growing rnge of silver-bering devicescn provide n iportnt offset to the thrifting discussedbove. n ddition, we lso highlight soe res wheresilver consuption is running “counter trend”, in otherwords those industries whose silver content (i.e. per unit ofdend) is tending to rise.Finlly, the report considers the outlook for the jorfbricting nd consuing silver industril rkets.Trditionlly dointed by the United ttes (ccountingfor 24% of the globl totl in 2011), we ssess theprospects of soe of its nerest rivls, including hin,whose contribution over the pst decde hs risen fro 11% shre in 2002 to 18% lst yer. This of coursereects the growing nufcture of silver coponents inthe doestic rket, but on consuption bsis, hinenjoys fr greter stnding, given its substntil iportsof sei-nufctured industril silver.
1992-01 2002-11 2012-14fag ag ag
ndustril Fbriction 313.4 436.9 483.3ource: Thoson euters GFmDUTa FaBaTOHa OF GOBa V OFFTaK
010203040506070IndustrialPhotographicJewelrySilverwareCoins & MedalsSource: Thomson Reuters GFMS% of Total Fabrication20002014F2011