China will continue to be a major driver in the global silver market for years to come, fueled by continued industrial demand and silver mining activity, says international industry association, the Silver Institute.

“China is by far the largest consumer of silver globally, accounting for 18% of global fabrication demand in recent years. 

“In addition, to meet its robust demand needs, the country is a major destination for imported silver products fabricated in the US, Japan and other countries,” the institute states.

Moreover, China is also the third-largest silver producing country worldwide and is a key player in terms of processing primary raw materials from around the world.

Important industrial uses, as well as investment, bullion trade, jewelry and silverware demand have been examined in a new report ‘Prospects for the Chinese Silver Market’, published by the institute. 

This publication was released at the seventeenth China International Silver Conference in Shenzhen, China, at which the Silver Institute served as a host, on Wednesday. 

The report was researched and produced by Metals Focus, a leading precious metals consultancy based in London.

The report included highlights around photovoltaic demand, reporting that China’s consumption of silver for solar applications has been rising in recent years to an estimated 65-million ounces in 2017. 

More than 70% of global solar panel production takes place in China and local powder fabricators are only able to satisfy a portion of the essential powder and paste for manufacturing and, therefore, rely on imported silver to fulfil their requirements.

“Although policy changes will most likely see volumes decline modestly this year, the long-term uptrend is expected to resume in 2019, assisted by still sizable local installations and strong sales abroad,” the report found.

Further, the report’s research looked at electronic and electrical demand, noting that growth across a range of end-use applications has and will continue to fortify demand. 

“Significant areas of growth include touch panels, light emitting diodes and equipment used in electricity generation. Chinese consumption of silver for electronic and electrical uses was estimated at 78-million ounces in 2017 and is forecast to grow modestly this year.”

Regarding brazing alloys and solder, the report said brazing applications that rely on silver should experience further gains in the years ahead, as China continues to focus on infrastructure development.

Brazing alloys and solders accounted for 24-million ounces in 2017. A range of end-use applications, including railway infrastructure development, increasing car sales, refrigeration and air conditioning, should fuel this growth, the Silver Institute remarked.

Meanwhile, jewelry and silverware have suffered declines in China in recent years, with combined fabrication reaching 29-million ounces in 2017.

The main drivers of this have been changing consumer appetites and the impact of anti-corruption legislation on the gifting market. The authors of the report believe, however, that the end of this downtrend is near. 

“In fact, silverware has already turned a corner, while silver jewelry in China is expected to return to positive growth from 2020 onwards.”