Silver
From IntFX
Contents |
[edit] Silver
Silver metal in its pure state has a brilliant white metallic lustre. It is a little harder than gold and is very ductile and malleable. It is classified with the precious metals. Silver is stable in pure air and water, but tarnishes when exposed to ozone, hydrogen sulphide, or air containing sulphur because of the formation of a silver sulphide.
It has the highest electrical and heat conductivity of all metals and the lowest contact resistance. Cold working will reduce this conductivity. When heated above its boiling point, silver boils off as a green vapour.
[edit] General uses
Applications for silver include:
- Silver as sterling silver is used for jewellery, silverware, electrical contacts and the like.
- Silver is of the upmost importance in photography (where approximately 30% of the U.S. Industrial consumption goes into this application).
- Dental alloys
- Coinage
- Silver is used in the making of solder and brazing alloys and electrical contacts
- High capacity silver-zinc and silver-cadmium batteries
- As paint it is used for making printed circuits and other electronic applications
- It can be deposited on glass or metals by chemical deposition, electrodeposition, or by evaporation to make mirrors
[edit] Pricing structure
Over the last 100 years the price of silver and the gold/silver price ratio have fluctuated greatly due to competing industrial and store-of-value demands. Historically the gold/silver ratio has been round 15:1. In 1980 the silver price rose to an all-time high of US$49.45 per troy ounce. By December 2001 the price had dropped to US$4.15 per ounce, and in May 2006 it had risen back as high as US$15.21 per ounce. As of 2006, silver prices (and most other metal prices) have been rather volatile, for example, quickly dropping from the May high of US$15.21 per ounce to a June low of US$9.60 per ounce before rising back above US$12.00 per ounce by August. [1]
[edit] Current consumption trends
Total global silver fabrication dipped by a little under 1 percent in 2006 to 840.5 Moz, in spite of a trend toward significantly higher and more volatile silver prices. Most notably, industrial applications, a key component of the demand complex, posted a 6 percent gain to 430.0 Moz, recording the fifth consecutive year of growth in this category. China posted strong industrial demand growth at 10.4 percent, and Japan recorded an equally impressive 10 percent increase in 2006. Last year represented a record for the United States with respect to total industrial silver use, posting a 6 percent increase to 106.8 Moz. Total industrial demand exceeded 50 percent of total global fabrication demand for the first time in 2006.
[edit] Price forecasts
Noting that the spot silver price has averaged $16.07/oz year-to-date 2008, Merrill Lynch raised its 2008, 2009, and 2010 silver price forecasts from $14, $13 and $12/oz to $15.50, $16.50, and $17/oz respectively. "We are also revising upwards our long-term silver price forecast from $10.00/oz to $10.50/oz.
The analysts forecast that mine production will account for 71% of total silver supply in 2007, as a new generation of silver mines commences production. "For 2008, we are forecasting a 5% increase in YOY mine output to 675 million ounces as several new mines ramp up (San Cristobal and San Bartolome in Bolivia, Palmerejo, Alamo Dorado, Ocampo and Delores in Mexico), and Manatial Espejo in Argentina. Looming in the future is the giant Pascua mine ion Chile."
Based on gold prices of $900/oz and $16.75/oz silver, Merrill Lynch estimated the current gold: silver ratio at around 54 times (or 54 ounces silver for every ounce of gold). [3]
[edit] Major producers
Global silver mine production edged up fractionally in 2006, with notable gains in Latin America and Asia. Total silver mine production reached 646.1 Moz last year, with Peru, Mexico, China, Australia and Chile the top five silver mining countries. Last year, silver generated at primary mines fell by 10 percent to 161.4 Moz, representing 25 percent of global silver production. [4]
