A rising investment demand and a gradual return of industrial consumption for silver could hamper the adoption of Silver-Zinc batteries for laptops, electronic devices and if the market leaders would have us believe, even electric cars.
First, the market. Silver investment was hit in the downturn in a way that gold was not. Where gold became a store of value in an uncertain world, silver was viewed more as an industrial metal for which demand was falling with global GDP. But as economies have recovered so has industrial demand and with it interest from the investment community. Silver has risen from somewhere around $11/ounce at the beginning of the year to just under $18/ounce today, but still some way off it’s peak of $21/ounce in April last year. Gold, on the other hand, has exceeded its 2008 peak of around $1010/ounce by some 10%, largely because of its perceived role as a hedge against dollar depreciation. So with a resurgent industrial role, silver has some catching up to do according to a report reprinted in CommodityOnline as severely depleted inventories are re-stocked. In fact there are quite a few supporters for a higher silver price. This article in Kitco predicts Silver has considerable upside potential in the short term $22, medium term to $32 and long term to $51/ounce.
So silver prices look like they have significant upside potential. Where does that leave new technologies or new applications for existing technologies that could be significant users of silver? One new application for a largely existing technology is Silver-Zinc batteries, largely these have been confined to high tech applications in space craft, torpedo’s and aircraft or to everyday uses as the small silver colored button batteries used in watches and other small electronic devices where size, low weight and long life take precedence over the lower unit cost of nickel alkaline batteries. But a California based battery maker called Z Power has developed and patented a new cell design using nano particles and a special separator membrane to dramatically extend the life of silver zinc or silver oxide batteries to the point they claim they are viable for use in laptops, mobile devices and even cars. Z Power’s silver-zinc battery offers some 40% more run time than lithium ion, a flatter power delivery curve and, with the new technology, long life – without the lithium ion batteries drawbacks of potential flammability. Electric car designers would be delighted to work with a battery that packed 40% more power and removed the risk of fire provided cost was not prohibitive.
Greater power density allows smaller batteries or longer life between charges but clearly the cost of silver could be a major hurdle against take up over the cheaper lithium-ion battery. Z Power is proposing a closed loop recycling program for batteries used in laptops or even cars, whereby the consumer would exchange a battery when re-charge levels drop below a certain point and Z Power would recycle the silver content – dramatically reducing the life cycle cost of the battery as a component of the overall product cost. This approach has been phenomenally successful in the pharmaceutical and petrochemical industries where Platinum Group Metals (PGM’s) used as catalysts are often part of closed loop recycling programs reducing the process company’s material cost, price volatility, supply risk and environmental risks. Toyota has also developed a closed loop recycling program for the nickel metal hydride batteries in their Prius Hybrids. If Z Power can do the same with their silver-zinc batteries may be they really do have a future in our mobile devices and ultimately electric cars.