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China Leads "Strong Recovery" in PV Silver Demand

Global photovoltaic silver demand seen rising 5-10% in 2014...
A SHARP turnaround in the global PV market, led by China, is set to boost world silver demand from the solar-cell industry by 5-10% in 2014 according to leading analysts Metals Focus.
The photovoltaic industry – which prints conductive silver inks onto PV cells to collect and conduct solar energy as electricity – saw a "hemorrhage of silver use" over 2012 and 2013, data consultancy Thomson Reuters GFMS said in its Silver Survey this spring, published for the US-based Silver Institute.
Global over-capacity, plus the loss of those Chinese, US and European government subsidies which had created it, met a drive to replace or reduce the amount of silver used in each cell after the metal hit near-record prices in 2011.
2014 in contrast has now seen a "revival" of PV demand, says metals analyst Robin Bhar at French investment and London bullion bank Societe Generale, with the industry "emerging in strong health" according to private consultancy Metals Focus.
Indeed, amongst renewable energy sources, says a new report from the International Energy Agency published Thursday, there is a "stronger outlook" for solar than other technologies such as windfarms.
"After surging early this decade," says Bhar at Societe Generale, "demand from the solar industry went through a tough period in 2012 and early 2013...[with] a drop in the pace of new installations globally."
But now, and helping drive a 90% drop in silver stockpiles at the Shanghai Futures Exchange (SHFE) over the last 18 months, the market "has seen a turnaround, with 2014 on course to see a record amount of additions of Chinese solar capacity."
Export data further suggest that China's sales of PV cells to foreign buyers have also "risen appreciably," Bhar adds.
"Following a difficult 2012 and early 2013," agrees London-based consultancy Metals Focus, "the solar industry appears to have emerged in strong health," with last year seeing a 27% rise in global installations on one estimate.
Reviewing PV industry forecasts for 2014, "we would not be surprised to see global installations comfortably hit a new record high," their report adds, "perhaps exceeding 45 gigawatts."
Total PV capacity worldwide ended 2013 around 140 GW on leading estimates. Thursday's IEA report says that will rise to 400 GW by 2020 on its baseline forecasts, with potential to reach above 500 GW if "ambitious policy aims" in the Middle East and other regions are put into action. But further drops in unit costs will also be needed.
Even as silver prices traded 60% below 2011's spike to $50 per ounce, thrifting and substitution saw the PV market's silver demand drop 21% in 2013, according to Thomson Reuters GFMS.
That was despite 10% growth in solar cell output, as average silver use was cut from 0.2 grams per cell to 0.14g.
Further thrifting in 2014 could cut silver use per cell by another 10%, Metals Focus now estimate – "significant, but pale in comparison to the rate of thrifting that was seen back in 2011."
Totaling 1,260 tonnes, last year's PV silver demand accounted for some 3.8% of global consumption on GFMS's data.

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