Posted on February 13, 2023
Speculation about how much silver is used in various products is common for those that follow the precious metals. It is an important fact to know when one considers the sources of supply and demand and considers how markets may move in the future.
Plus, it is just generally interesting knowledge on how things are built and materials are made. It is something I have always followed. The following graphic from Visual Capitalist outlines the major uses of silver and the properties that make the metal truly unique.
One thing that sticks out about silver is that it is used just about everywhere. It is truly a ubiquitous part of our economy that we often take for granted. Well, of course, I know precious metals investors already know the value of silver in the industry, but we do have new people interested in the metals at the time so I have to assume not everyone is fully aware of how important silver is. Hence, the reason I wrote this article!
One of the most important factors to know about silver is whether more of it is used in products that we buy, or in investible forms like jewelry, coins, and bars. Visual Capitalist has over 50% of silver used for industrial purposes whether it be electronics, photography, or other uses such as military or medical. That number is similar to the ones I have seen quoted many times in industry publications, so I have no reason to doubt it.
Silver is the most electrically conductive material, and it is considered highly malleable which just means we can melt, bend, and form it easily for a multitude of applications. Silver is used in electronic circuits and included in things like mobile phones. Silver is also used in medicine because of its anti-bacterial properties. One can often see bandage products sold with silver threading mixed in as a disease preventative. Silver is also used in many other medical and dentistry tools and implements.
Silver was used in the Middle Ages in various forms of jewelry and adornment. Silver was also used as a medium of exchange, aka ‘money’. Early forms of silver money were hack silver, which was silver slices, ingots, and early silver-stamped coins.
Silver was also used in water barrels and in eating utensils to fight pathogens. Silver was often taken on long boat trips to keep food and water supplies fresh and unspoiled. In the 1800s, silver was put into tinctures and mixtures designed to address infections and to calm post-operative inflammation.
Silver evolved into being used for photography, as early technologies used silver film to print the image. Silver is also used in the chemical process to create plastics, polyester, molded items, and toys. Over 1.6 million tons of silver had been mined prior to the year 2000.
Silver is used to treat warts and ulcers, used in burn wound cremes, water purification systems, most electronic devices, smartphones, laundry detergents, jet and helicopter engines, missile technology, solar panels, electric vehicles, and even in air conditioning systems fighting bacteria and other airborne pathogens.
From 2001 to 2020, the world produced almost a half million tons of silver. We can see that silver usage has increased significantly with the advent of modern technology. In fact, we could not experience many of the modern conveniences of daily life without silver.
Silver is used quite a bit for military applications. Many pundits have mentioned that cruise missiles may use up to 500 ounces of silver. While the exact amount is unknown, missiles and torpedoes do need extensive amounts of silver for the battery technologies that control missile propulsion, target acquisition, and recovery post-missile delivery.
Interesting modern use of gold and silver in the military has to do with alloys created for the purpose of reducing energy usage, reduction in weight of energy harvesting devices, and more powerful optical sensors. Scientists at the US Army Research Laboratory along with those at Paulista State University in Brazil created the new gold-silver alloys.
A researcher explains:
“We demonstrated and characterized gold/silver alloys with tuned optical properties, known as surface plasmon polaritons, which can be used in a wide array of photonic applications,” David Baker, one of the authors of the paper, said.
“The fundamental effort combined experiment and theory to explain the origin of the alloys’ optical behavior. The work highlights that the electronic structure of the metallic surface may be engineered upon changing the alloy’s chemical composition, paving the way for integration into many different applications where individual metals otherwise fail to have the right characteristics.”
Industry experts consider silver as one of the top eight minerals used in our nation’s defense. So, it is definitely an important mineral with many uses that we should be aware of.
Per the Royal Society of Chemistry, silver is in relative abundance in the crust. However, silver does have a relatively high supply risk as well as much silver comes from less politically stable governments than the US. Therefore, there is some concern in the industry that silver supplies should be protected and the US should manage its supply risk to silver more proactively.
The US Mint has been making a gorgeous series of coins called the America the Beautiful. The series highlights people, places, events, and things that have enormous significance to our history. The series itself has several fantastic designs that stand out amongst a good coin collection. This is a fine option for your collection!
Rob Kientz is a precious metals industry expert with over twenty years of investment experience in bond, stock, real estate, commodities, Forex, and precious metals markets.