Driven by multiple policies this year, the demand for silver in the electrical alloy industry has increased compared to last year, with a significant improvement in order volume. According to SMM survey of 19 enterprises (mainly focusing on silver-based contacts), these enterprises' silver usage this year is between 1,306.4 mt and 1,403.6 mt. It is estimated that the entire silver-based contact industry might use around 1,700 to 1,900 mt of silver (excluding enterprises purchasing silver wire and silver sheet). According to industry professionals, the entire electrical alloy industry used about 2,300 mt of silver last year, and the situation is better this year compared to last year. Although high silver prices have somewhat suppressed demand, the silver usage has slightly increased compared to last year, showing some improvement.
Overview of Silver Usage in the Electrical Alloy Industry:
Silver, due to its excellent electrical and thermal conductivity, stable resistance, and oxidation resistance, has become an important material in the electrical alloy industry. It is widely used in electrical contact materials, electrical heating alloys, and resistance alloys. Particularly in electrical contact materials, silver forms a sulfide film in the atmosphere, which increases resistance but is easily broken down in electrical contacts, maintaining "metal contact" while reducing resistance. Therefore, such materials are widely used and have a high usage volume in electrical contact materials. However, due to the high price of silver and the need to improve its anti-sulfidation ability, alloying is often used to improve performance. Common alloying elements include copper, nickel, tin, iron, chromium, tungsten, rare earth elements, and other trace elements. In the past, silver cadmium oxide was widely favored for its excellent performance. However, with the improvement of environmental protection standards, silver tin oxide and silver nickel materials have gradually replaced silver cadmium oxide due to their environmental friendliness and good electrical performance.
Development Overview of the Silver-Based Contact Industry:
As the domestic electrical alloy market continues to mature, the silver-based contact industry is booming. Domestic enterprises are gradually replacing foreign electrical contact manufacturers, becoming the main global suppliers of electrical contacts. In recent years, the production and sales volume of this industry have repeatedly achieved new highs, with silver usage reaching a historical peak in 2021. This growth was driven by the pandemic abroad, which caused many international producers to shut down, leading to a large number of overseas orders being transferred to domestic producers, rapidly expanding the production volume of domestic electrical alloy enterprises. As foreign enterprises resumed operations, overseas orders returned abroad, and the "winter" in the real estate sector gradually took effect, domestic orders declined sharply, hitting bottom in 2023, but rebounded this year. This rebound is mainly attributed to two factors: first, market demand. The strong demand for NEVs, the inventory consumption and order increase driven by the home appliance "national subsidy" policy, and the development of smart equipment and smart products have boosted the demand for the electrical contact industry. Although the recent high silver prices have slowed down order placement and delivery by downstream enterprises and the trend of "cost reduction and efficiency increase" has suppressed the amount of silver added, the electrical alloy industry has still grown compared to last year. Second, industry optimization. Due to intensified industry competition in 2023, small and medium-sized and high-cost enterprises in industry-concentrated areas such as Wenzhou and Foshan were eliminated, further consolidating the industry through optimization and integration.
Note: Some information is sourced from the Electrical Alloy Branch of the China Electrical Equipment Industry Association.
