[SMM Analysis] Silver consumption by downstream consumer photovoltaics was strong in 2023

Domestic downstream industrial consumption of silver in 2023 included photovoltaics, electrical alloys, silver jewelry, electronic silver powder, catalysts, silver brazing materials, medicine, silverware, silver coins and other physical investment products, photography and other industrial applications.
Among them, SMM surveyed domestic photovoltaic production volume in 2023 as 4,600 tons, accounting for 83% of the survey samples. Domestic silver demand from photovoltaic is expected to be 5,500 tons, a year-on-year increase of 83%. The huge increase in photovoltaics depends on the maturity of P-type technology in the first half of the year and the domestic demand for silver powder. After entering the photovoltaic peak season in the third quarter, a large amount of capital and companies flooded into the photovoltaic market, and downstream companies expanded production in large quantities, bringing about a surge in demand for raw materials. The production volume of domestic silver nitrate silver powder and silver paste companies has also increased significantly. Due to the concentration of photovoltaics and large demand, the premiums and discounts of domestic silver spot prices have increased.
The demand for silver jewelry has always been traditional domestic silver demand. Market-related reports predict that the demand for silver jewelry increased by 6%-10% in 2023, and consumption is expected to be around 1,100 tons. Demand increased slightly. In the first half of 2023, demand in Shuibei in Shenzhen, China's largest jewelry concentration center, was booming, especially in the first quarter. The prices of domestic gold and silver were relatively low, stimulating consumer spending. At the same time, the sophistication of silver jewelry was also rising, and the proportion of online consumption was also greatly increasing.
The demand for catalysts and other categories also increased in 2023. However, since the domestic production capacity of products requiring silver catalysts was large in 2023, the possibility of further market expansion is not high. At the same time, silver-containing catalysts are also reducing silver content whilst ensuring catalytic efficiency. Other silver consumption is expected to be around 1,100-1,200 tons in 2023.
Silver consumption in other industries declined.
The demand from electrical alloys was still reduced relative to 2022. The industry itself is in a mature stage, and process and technology improvements have reached a high level. However, restricted by the demand for real estate and white household appliances, electrical alloys did not improve in 2023. In addition, some small and medium-sized enterprises have withdrawn from the market, and the market generally reflected that the demand in 2023 decreased by 20%-30% year-on-year. It is estimated that the demand from electrical alloys in 2023 was around 1,500-1,600 tons.
The demand for silver in the electronics industry is also declining. The market estimates that the amount of silver used by the electronics industry in 2023 will be 500-600 tons. Due to downstream cost reductions and price wars, mid-to-high-end technology companies in the electronics industry are reducing silver content and increasing the proportion of base metals. To reduce costs and lower selling prices to increase the market share of domestic companies, demand from low-end technology companies has rebounded slightly from 2022, but the silver content has also declined.
The demand for silver from such as silver solder has also declined compared to 2022, because the overall price of silver in 2023 was high. In order to control costs, solder companies have reduced silver consumption or the use of 302 solder to achieve the purpose of cost reduction.
The demand from photovoltaics was outstanding in 2023, the demand for silver jewelry was stable, and the demand from catalysts was also acceptable, but the remaining silver demand decreased. It is expected that the overall downstream demand in 2023 will be between 11,000-12,000 tons. In 2023, driven by the huge demand from downstream photovoltaics, there was a rise in silver spot quotes.