Anyone who’s been following silver trends knows that despite many years of low silver prices, signs that there’s a silver supply crunch on the horizon continue to mount up. There are a lot of factors in the creation of this supply crunch: silver prices themselves are a major culprit as they’ve sent silver miners looking elsewhere for profits; silver is simply becoming scarcer and more expensive to dig out of the ground; and fabrication demand for silver (including everything from silver coins to solar panels) continues to rise steadily.
Silver recycling meets nearly a quarter of the world’s silver demand. But it’s getting harder and harder to recycle much silver. Much of it is never recovered and it’s used in many products from which it is impossible to recover.
With First Generation Metal, impurities need to be refined out of recycled silver through smelting and then a process separating silver from the other metals contained in the ore. That’s also how silver recyclers produce useful silver ingots, but first silver has to be recovered from the product.
Sources of Silver Scrap
E-Waste – Electrical trash is one of the biggest sources of silver scrap. These include computers, laptops, and mobile phones, which altogether use up 28 tons of silver in China alone (not to mention 4 tons of gold and 6,000 tons of copper). The biggest problem with recycling silver from e-waste is how much is never recovered.
Photographs – Before digital photography, nearly 60 percent of the world’s silver was consumed by taking photos. That also meant that old photographs were a rich source of silver recycling. Old Kodak photos of course are still valuable for silver recycling, but this source of silver recycling is already falling behind e-waste.
Jewelry – At the peak of the gold bull run, you probably couldn’t ignore ads from cash-for-gold dealers. They would buy gold jewelry for cash and then turn around, smelt it, and sell it as ingots. Many now offer the same deals for silver. Recycled silver is also popular when making jewelry. It’s widely seen as a more environmentally responsible process and conscientious jewelry customers often prefer recycled silver.
While the live price of silver today hasn’t varied much in the last several months, the sideways trading won’t be forever. Silver recycling is becoming harder and more expensive as more of it is found in e-waste. In Africa, where much of the West’s e-waste is illegally dumped, only 25 percent of e-waste is recycled. Gold and silver is hardly ever recycled from e-waste in Europe and North America on a meaningful scale. Often electronic devices contain so little precious metals individually it’s not economical.
Any deeper gaps between silver supply and demand are going to be reflected in silver prices. Right now, the market is in what silver dealers like Silver Gold Bull call a “window of opportunity.” Prices are low and abnormally stable for the precious metal. You can find great deals on silver coins and silver bars from dealers like Silver Gold Bull to invest in real physical bullion right now.
Once silver prices make a breakthrough, it will only get harder and harder to get into the silver market profitably. Do your research on prices, shipping, and storage solutions to make sure you come out ahead. But as silver recycling becomes even more expensive, expect to see silver prices rise.