Some light (LED?) from the end of the tunnel From Bullion Vault today;- SILVER USE in three fast-growing technologies could grow 275% over the next four years, according to new research. Produced for the Washington-based Silver Institute of international miners, refiners, wholesalers and manufacturers, the 22-page report notes that these newer uses of silver "might at first glance seem modest" compared to industry's total 15,000-tonne demand for silver per year. But looking at flexible screens, LEDs and interposers for stacking semi-conductor chips in electronics, London-based consultancy Metals Focus sees these 3 technologies together growing their annual silver use from 125 tonnes to 450 tonnes and more by 2018. "Although not 'new' technologies" in themselves, says Metals Focus, their application of silver "is yet to reach widespread commercial use." Indeed, it was the 4.5-fold surge in silver prices from 2009 to 2012 caused by the financial crisis which led mobile devices such as cell phones and e-readers to use other conductive ink materials, says a separate report from forecasting consultancy IDTechEx, focusing instead on using indium-tin oxide (ITO). With flexible displays now gaining market-share however, "ITO faces some critical drawbacks," notes Metals Focus' silver technology report, because it is a "brittle, fragile material". Using silver nano-wires instead can make the screen as flexible as the material supporting it, while in terms of visual performance, "95% transparency has already been achieved by some industry players." Putting the ink/paste component of the conductive screen industry's costs at $1.6 billion for 2014, IDTechEx sees the market growing 4.5% per year over the next decade. Touch screens employing silver in the conductive ink currently use some 18-20 grams per square meter on one estimate. Indium itself is primarily mined in China, whereas silver is mined worldwide. Forecasting company IHS believes sales of non-ITO touch screens could grow 300% in 2014 alone. According to David Jollie, precious metals analyst at Japanese trading house and London market-maker Mitsui, "Growth in tablets, smart phones and particularly touch screen monitors means silver demand could double here over the next decade, more than offsetting any weakness in silver demand from the photovoltaic [solar panel] sector." Global demand for LED chips (light-emitting diodes) is meantime set to reach 61 billion units this year, according to NPD Display Search, more than 250% above the level of only two years ago. Falling demand for LED chips in televisions and other smaller devices is being more than offset by outdoor use and general lighting. Pressured to boost energy efficiency further, the industry is increasingly using silver both to reflect light out of the module, and also in the bonding wire and adhesive layer needed to construct it. Metals Focus' third new silver technology, interposers, enable electronics manufacturers to "stack" micro-chips, saving space and boosting functionality. Connecting the different chips together, "Traditionally interposers have been made of silicon," says their report for the Silver Institute, but new demands means that material "is fast approaching its limit in terms of performance" and cost efficiency. Using silver is very early-stage yet, Metals Focus stress, and the metal does face competition from other solutions, notably copper. Starting however from a current annual estimate of only 15 tonnes, commercial roll-out "could in principal" see 10-20 times as much silver being used for interposer technology by 2018, "underpinned by strong end-use demand."
Industrial Applications [DEMAND] 1990 -272.6 1991 -266.9 1992 -259.4 1993 -270.2 1994 -281.8 1995 -295.7 1996 -297.7 1997 -319.5 1998 -316.3 1999 -339.0 2000 -383.3 2001 -349.7 2002 -355.3 2003 -368.4 2004 -430.0 2005 -476.7 2006 -502.9 2007 -539.7 2008 -551.2 2009 -461.8 2010 -574.4 2011 -563.1 2012 -534.7 2013 -536.2 It doesn't look like industrial demand drove the price from $10 to $50 and back to $20. Maybe industrial demand never got in the tunnel in the first place.
I think you've missed the point . Allow me to optimistically "wax lyrical" for a moment.... Industrial demand 2013 - 536.2 (your figures - nice 1 ) Silver price average across the year (Estimate, as I can't see any charts while typing this) say $25. I'm sure you'll clarify this assumption Average this year, say $23. (again, an assumption, for arguments sake ) with industrial demand of, say 540, as supposedly, things are picking up. So;- We could hypothesise that, an industrial demand of 540 per year equates to an approximate year average of say $23 / oz, in the current economic climate. The article refers to new technology and the increased future use of silver therein. As an example.. My company ( I ) manage the on site construction of multi million construction projects within the Water Industry under a framework contract scenario. ALL new lighting is specified as LED ONLY, as it is far more efficient. Just one example of the application of new technology within just the construction industry alone, where silver usage will now increase, indirectly . So, re reading the article I interpret that in the not too distant future (next few years) the industrial demand for silver will increase. So, the demand will go UP Ergo, the average price should follow suit thats without including the demand from intelligent stackers and investors. MY conclusion is therefore, as uses bought about by new technologies increase, so will demand, and the average price will follow suit, proportionately. Technology marches on. If it needs silver, it needs silver. a finite quantity. Supply and demand More demand, - higher prices. What d'you think ?
You "equate" a certain price to industrial demand, but as the demand figures make clear: the industrial demand trend showed little to no correlation to the price trend. That implies that OTHER demand drove the price. Not industrial. If you need, I can show you figures that make clear which demand. Hint: it's related to this forum. What d'you think?
LOL, I hear you Could you do this ? ( I can't I don't have access to the information you do) put the year average price (derived from using the price on the 18th day of each month - this would go some way to adjusting for the month end option smash down) against the industrial demand figure on a monthly graph/chart. Hypothetical example 2001 = 349.9 Average $12 ( 12months @$12 =$144 (divide by 12 = $12 average) = flat line Thus 2001 - demand 349.9, average thru year $12oz Then add investor demand - physical, not ETF, and plot. Then add another for ETF holdings, and plot. Should keep you occupied for a few hours !! I'd be interested in seeing the trends. My previous post was written for an "unmanipulated price" world, in a sort of Industry uses X, price = Y theme, as a baseline. Cheers S.
My 'information access' is just https://www.silverinstitute.org/site/supply-demand/ and a spreadsheet file of historical data they sent me upon request. You can check it there yourself. I don't need to occupy myself with it. Because I already did. See, I start from data, and derive a conclusion from it. The opposite would be weird, no? These is spreadsheet data based data: (note: since the 2013 data they rearranged the supply and demand classes, hence the OUTDATED) (figures in Moz, million ounces) [OUTDATED] Implied Net Disinvestment (positive means it's [SUPPLY], negative means it's [DEMAND]) 1990 46.4 1991 48.9 1992 99.2 1993 117.3 1994 143.7 1995 93.8 1996 137.4 1997 78.5 1998 47.6 1999 51.1 2000 94.7 2001 1.9 2002 24.9 2003 7.8 2004 67.9 2005 0.7 2006 24.9 2007 53.5 2008 48.1 2009 -61.9 2010 -85.3 2011 -69.3 2012 -198.3 2013 -99.7 Coins & Bars [DEMAND] 2004 -53.0 2005 -51.5 2006 -48.7 2007 -51.2 2008 -187.7 2009 -87.9 2010 -146.1 2011 -212.6 2012 -139.3 2013 -245.6 ETF Inventory Build (positive = DEMAND, negative = SUPPLY) 2004 0.0 2005 0.0 2006 157.8 2007 54.8 2008 101.3 2009 153.8 2010 132.6 2011 -24.0 2012 55.1 2013 1.6 Exchange Inventory Build (???) 2004 -20.3 2005 15.9 2006 -9.0 2007 21.5 2008 -7.1 2009 -15.3 2010 -7.4 2011 12.2 2012 62.2 2013 8.8 Now compare this "stockpiling" / "destockpiling" demand trend with the price trend in USD: 1990 4.068 1991 3.909 1992 3.710 1993 4.968 1994 4.769 1995 5.148 1996 4.730 1997 5.945 1998 5.549 1999 5.218 2000 4.9506 2001 4.3702 2002 4.5995 2003 4.8758 2004 6.6711 2005 7.3164 2006 11.5452 2007 13.3836 2008 14.9891 2009 14.6733 2010 20.1928 2011 35.1192 2012 31.1497 2013 23.7928 2014 20.3715 Yes, these are the AVERAGE prices of the year. Of course. If I had been a Silver Doctor I would, among other tricks, have selected some date in a year to date comparison as to predraw conclusions easier. Now, do you see a correlation between all these kinds of stockpiling/destockpiling, with the average price trend? I do! Even with my sunglasses on!
Stax, It wasn't an issue is older years. Now, some new technology that uses silver will replace current technology that uses silver. Has that been factored in? The investment demand has been the price driver in silver and that demand is weak right now.
I wondered several times about that demand being weak. We didn't see Mint sales drop down from the 2011 levels, as Coins & Medals, and now Coins & Bars, proves.. ETF demand ceased already since, and including, 2011, as ETF Inventory Build proves. In fact, not any demand class dropped since 2011. At least not in any way that explains a $30>$20 price drop. There is just nothing out there, that supports that demand drop. And the supply stayed the same over this period, also in 2013, where an increased mining was more than undone by a decreased recycling. That $30 > $20 price drop should have happened somewhere during 2011, the year that ETF Inventories, for the first time in their existence, net dropped over the year, and afterwards little changed. For some reason, somehow, that price drop was delayed to early 2013. One explanation may be Net Hedging Supply 2001 18.9 2002 -24.8 2003 -21.0 2004 -2.0 2005 45.9 2006 -11.6 2007 -24.1 2008 -8.7 2009 -17.4 2010 50.4 2011 12.2 2012 -47.0 2013 -34.3 2012 and 2013 was demand years. So their purchases may have replaced the ETF demand. However, the 2 years together is only 81.3 Moz, and even 2013 was a demand year, contradicting with the dropped price. 2013's $30 > $20 drop is, so far, a mystery. It's like as if a stockpiling/destockpiling took place outside the 'radars' of Thomson Reuters. Maybe it took place, the trading happened, in dark pools by institutionals?
Pirocco That data's excellent, warrants further studying factoring in economic conditions/technological advances may turn up something interesting. DCCPA, yeah, investment demand from the big money is weak, I agree. If that were to change, price would no doubt rise. At the moment it's mostly in stockmarkets though. Whether new technology demand has been priced in I have no idea but, existing tech+new tech demand= more base demand. Now, if supply remains constant , overall, price will rise. By how much depends on available constant supply, but I don't think it would be by much. I'm struggling to be concise, best notion I can come up with is - rename new tech demand as "return to kodak film" prices would surely go up due to increased ( additional to current) demand not by enough to make your stack significantly more valuable, but more thana few cents/dollars per ounce? Meaning in 20 years time you'll be able to buy the same with an ounce as you can today, plus a tiny bit more comparatively speaking. But you'll never get "to da moon" increases unless the "sky falls in" sent from my iPhone via a hotel room
Pirocco, youposted while I was typing my last post I missed out two other things 1. Economic chaos 2. War either could significantly turn the Market, short term.( one may trigger the other ?) Then... Cash in, or exchange, for, land/ boat/ house ? Personally I'd go for a decent sized boat, and get the f*** offshore till the dust settled
Depends on your situation at the time I guess. Me got debts? No got mortgage? no got kids? No got skills? yes got transport? Yes got Gold? Yes got food? Yes got "way to defend oneself"? Oh yes got silver? Yes got safe place in times of utter chaos? No need this? Yes got gold/silver? Yes got boat? Not yet, want paper? no want silver? Yes got boat See ya! Got boat!
See that 'us' in my question? What situation (market) would make us (not Joe and not Fred, but everybody that intends to buy silver) willing to pay more for an ounce silver?
For me, nothing. In UK the "game" is silver spot at 11.75 1 oz brittannia from bullion dealers = 14.49 ( roughly 15% over spot) then add 20% VAT to 14.49 so I ( UK stacker) pay 17.37 per ounce. Minimum! What a Con ! Observation: coins from US/ Canada are, after being flown several thousand miles, cheaper per unit than coins produced here how does that work? It's all rigged against us, uk coins - no Capitol gains tax , but more expensive than foreign coins VAT @ 20% on all silver sales I'll stick with Gold, no CGT, no VAT rant over
Remember, the question wasn't about you, wasn't about me, wasn't about gold versus silver and wasn't about differences related to tax/whatever. The question was, what situation would make everybody that intends to buy silver willing to pay more for an ounce silver? Anybody that talks about higher prices, should first find the answer on this.
If we lost confidence in fiat currency? There'd be a rush to convert paper, or numbers in your bank account, to physical assets.
From what I have seen, when people lose faith in fiat currency, they turn to another fiat currency. Zimbabwe lost all faith in their own dollar so switched to the American Dollar. During the crisis in Europe the captial flight was to the USD and whenever countries in South America start experiencing troubles they try to get hold of USD as well. Same with governments, you lose faith in one side so vote for the other, out of the frying pan into the fire.
1) Fear/greed are terms that are just extreme versions of it. Why would risk management imply being scared or being greedy? It is what it is: managing risks. If a biker decides to take a raincoat with him then he's not "scared" for rain, he just thinks that there is a chance to rain, and takes measures based upon this expectation. 2) Yes, losing confidence further in fiatcurrency provides a main reason to be willing to pay more for an ounce silver. So those that expects silvers price to rise, should see bank accounts at stake, higher price inflation not compensated for by intrest rate, economical production dropping in real terms, and so on. 3) And also a yes, when people lose faith in a fiat currency, and another is available, and the exchange rate makes them not lose too much (here we have again that risk management) they swap for it. And it also illustrates what a flight to assets requires: losing confidence in ALL available currencies. And since the central planners of the different currencies cooperate worldwide as to prevent any single currency to become too 'strong' or too 'weak' relative to the others, this 'all' situation got placed on the roadmap, IF that road is driven further on. A flight away from all currencies means world (hyper)inflation, and people won't just swap for ounces silver, they will dynamically swap to any monetary usable asset whoms price on the moment rose least relative to other such assets.
OK, I've calmed down now (bloody governments!) Right, the only thing that would make me pay a higher price for silver was if I had insider knowledge of something imminent that would seriously change the spot price. (upwards) As in silver being used to cure Cancer / Baldness :lol: , raise IQ, use in water purification ( this is in it's infancy but is being explored - who knows), new fuel source, revoluntionary technology, etc etc. Then, I'd willingly pay more. To turn your question around though; As Mr Spock would no doubt say..... What would make you pay less for silver? What would drive your decision to buy something that would be worth less than you paid for it. Is this logical, Captain ?
