Silver News

By Don Franz, Group Publisher, Photofinishing News (dfranz@photo-news.com)

Increasingly, there are discussions in the silver market about the potential impact of technology on the consumption of silver for photography. While many market participants express concern about this impact, their concerns are often overstated and not reflective of market reality.

True, digital photography is making great inroads, but we see net demand (total demand less recovered silver) for “photo” silver declining only slightly through 2008, from 87.5 million troy ounces in 2000 to 85.4 million troy ounces in 2008. Despite the emotional reaction to the declining sales of film photography, we do not foresee any major shift in the need for silver in producing silver halide products over the next five years.

Admittedly, film sales are falling in the United States, Western Europe and Japan, the biggest photography markets that represent the “developed” photography world. We project worldwide combined amateur and professional film sales to fall from 3.5 billion rolls in 2000 to 2.9 billion in 2008. However, film usage in the developing world is growing. In 2004, it is possible that the number of films consumed in China will surpass the number sold in Japan. For 2002 it is estimated that more than 250 million rolls of film were consumed in China, and even with the impact of SARS on travel, which is a major catalyst for picture-taking, an eight percent growth is expected for 2003. If the very dominant use of 36-exposure films in China is considered, compared to the dominant use of 24-exposure rolls in Japan, the number of consumer exposures on film in China could surpass those in Japan in 2003. In India, the number of rolls of film consumed should exceed 100 million in 2003, with a continuing growth of 10 percent forecast for the future. And the number of films sold annually in Russia is steadily climbing towards the 100 million mark.

Obviously, as the number of film exposures worldwide declines, so will the number of prints being made from film images. We project the total number of prints being made from films to drop from 135 billion in 2000 to 101 billion in 2008. On the other hand, there is very significant growth of prints from digital still cameras – rising from 3 billion in 2000 to 67 billion in 2008. Although a substantial percentage of these prints are now being made on home inkjet photo printers, more and more are being made through retailers, who are gaining a greater share of this business.

Because it costs less to buy a print from a retailer than to make it at home on an inkjet printer (and takes less time), we project the number of prints being produced on silver halide paper from film and digital imaging devices will rise from 135 billion in 2000 to 142 billion in 2008. While consumers will order fewer prints in the future, we expect the average print size to grow, so that photography paper demand is projected to grow from 1.8 billion square meters in 2000 to 2.4 billion square meters in 2008.

At the same time, the number of prints being produced on inkjet paper will grow from 2 billion to 37 billion worldwide; and prints produced by other technologies, primarily dye diffusion thermal transfer (“dye sublimation”) will reach 11 billion in 2008.

Based upon our expectations for the growth of silver halide based photography papers, silver usage for these products should rise from 46.0 million troy ounces in 2000 to 60.1 million troy ounces in 2008.

By contrast, silver usage is declining rapidly among other silver halide products, most notably in the graphic arts industry as the trend towards computer-to-plate accelerates. However, demand for X-ray films, which represent the largest usage segment for silver halide, are continuing to grow, despite the emergence of sophisticated digital X-ray technology.

Overall, we expect the use of silver in these silver halide products to remain relatively stable through 2008. In fact, we are projecting that in 2008 there will be 0.5 million troy ounces more used than in 2000.

Based upon discussions with manufacturers, we have assumed various wastage in the production of silver halide products, as well as different recovery rates for silver from exposed and process products. The amount of silver recovered from waste and used silver halide products is expected to rise from 177.8 million troy ounces in 2000 to 180.4 million troy ounces in 2008.

Silver News - First Quarter 2004