Market Reports

Learn more about all important trends in the precious metals markets in our market reports on a regular basis.


Heraeus Precious Appraisal

  • Edition 17 - 18 June 2018

China cuts solar cell tariffs; hits silver demand by 10 moz

Chinese photovoltaic (solar panel) installations could drop by a third this year. The Chinese authorities have announced a lower feed-in tariff, removed government subsidies for utility-scale projects and put a cap on the amount of newly installed distributed (small-scale) solar capacity at 10 gigawatts (GW) (compared to 19.4 GW in 2017). This level has almost certainly been reached after 7.68 GW worth of distributed solar capacity was installed in Q1’18, according to the Chinese National Energy Administration (NEA). This combination of measures means that there could be a sharp slowdown in photovoltaic installations in China in the second half of the year, negatively impacting silver demand.

In 2017 around 9% of silver demand, 94.1 moz, was used globally to make photovoltaics, according to The Silver Institute’s World Silver Survey 2018. Silver is used in solar panels to form the electrical connections on the cells. China is the largest manufacturer and user of solar cells with more than 53 GW of new photovoltaic capacity installed in 2017 (source: NEA), representing over 50% of global installations.

It was anticipated that Chinese solar installations would be lower than last year, owing to reduced feed-in tariffs for both distributed and utility-scale projects from the start of 2018, but that global installations would rise modestly. However, with the new rules cutting installations in China, and disruption to installations in the US caused by the 30% import tariff imposed by Donald Trump in January, global solar installations are likely to decline in 2018.

If global solar installations drop by 10 GW this implies a reduction of a little under 10 moz in industrial silver demand, equivalent to around 1% of total global silver demand. With a decline in industrial demand now likely, the silver price could lack support in the second half of 2018.

This document is being supplied to the recipient only, on the basis that the recipient is reasonably believed to be a professional market participant in the precious metals market. It is directed exclusively at entrepreneurs and especially not intended for the use of consumers.

The material contained in this document has no regard to the specific investment objectives, financial situation or particular need of any specific recipient or organisation. It is not provided as part of a contractual relationship. It is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment or as advice on the merits of making any investment.

This report has been compiled using information obtained from sources that Heraeus and SFA (Oxford) Ltd (“SFA”) believe to be reliable but which they have not independently verified. Further, the analysis and opinions set out in this document, including any forward-looking statements, constitute a judgment as of the date of the document and are subject to change without notice.

There is no assurance that any forward-looking statements will materialize. Therefore, neither SFA nor Heraeus warrants the accuracy and completeness of the data and analysis contained in this document.

Heraeus and SFA assume no liability for any losses or damages of whatsoever kind, resulting from whatever cause, through the use of or reliance on any information contained in this document. However, in so far as a liability claim exists under German law, Heraeus and SFA shall have unlimited liability for willful or grossly negligent breach of duty.

Unless expressly permitted by law, no part of this document may be reproduced or distributed in any manner without written permission of Heraeus. Heraeus specifically prohibits the redistribution of this document, via the internet or otherwise, to non-professional or private investors and neither Heraeus nor SFA accepts any liability whatsoever for the actions of third parties in reliance on this document.

Precious Metals Update Archive 2017

to top