When it comes to precious metals, gold and platinum are the two metals that are talked about the most; silver is often treated as gold’s poor cousin. The truth is, there is more demand for silver than there is for gold or platinum. The disparity may come from supply. Silver is easier to mine. It is often a byproduct of some other mining operation like copper for instance. Another misconception about silver is that it is an industrial metal. The demand is expected to come mostly from manufacturing industries however, more than 200 million ounce of silver were use to manufacture jewellery on 2016 and that number keeps on growing.
The second misconception is that silver is not recyclable. That unlike gold, you can’t get cash for your unwanted or unused silver. On the contrary, in that same year of 2016 ,139 million ounces of silver came from recycling while about 880 million ounces came from direct mining. These are facts that might interest you when you buy silver.
There is a market for recyclable silver. You can sell your silver jewellery, tableware or silver bullion for cash just like you can sell scrap gold for cash when you need to.
Because of misrepresentations or misconceptions like these the supply of silver from recycled sources is not at a level where it should be. There is definitely a need for recycled silver. If the numbers don’t go up manufacturers will have to rely on aggregators and secondary refiners to have their silver orders filled. This means that primary refineries like Valcambi and Asahi have to rely on secondary refineries. And secondary refineries are not known for producing the purest metals. This is because they usually have the capability of melting and assaying only and nothing more. Quality can be suspect. In fact, aggregators or secondary refiners are considered to be the entry point for illegal material.
There are ethical responsibilities placed on secondary refiners, the main one is making sure that they buy silver from a legitimate source and to know the level of purity that will get them the most amount of money for every ounce of recycled metal they manage to produce. To succeed in business they need to know the suppliers they can rely on for quality scrap. They are the middleman between a scrap silver seller and a primary silver refiner.
Primary buyers have to do due diligence on aggregators and secondary refineries who usually sell silver that has already been melted into bars. The primary refinery needs to have all the information about the chain of custody of the silver that arrives for further refining. It is a well known fact that there are countries that use their natural resources to find wars against the citizenry. This is referred as conflict precious metals. The consumers Want to know that they are not indirectly funding genocide and other crimes against humanity. Bodies that regulate production of precious metals like gold and silver have strict guidelines to make sure that this does not happen. Everyone along the value chain is conscious of the importance of responsible sourcing of Silver.