The Silver Institute, a Washington, DC-based nonprofit industry group, has commissioned metals consultancy GFMS to produce a report on the outlook for silver industrial demand.

The study will be published in February 2011, the institute said on Tuesday.

Silver prices have surged this year, touching a 30-year high above $30/oz last week.

Prices have been driven mainly by investment demand, spurred by dollar weakness and increased appetite for precious metals, as well as commodities in general.

However, industrial consumption is still the most important component of silver demand, the institute said.

“Industrial uses collectively comprise nearly half of all fabrication demand for silver annually, totalling 352-million ounces last year.”

Silver is used in a growing range of industrial applications, including electronics, batteries, chemical catalysts, brazing and soldering, biocides, optical devices, mirrors and glass coatings.

Industrial demand for the metal declined in 2009, but is expected to increase 18% this year, according to a GFMS forecast published in November.

The report commissioned by the Silver Institute “will clarify whether the 2009 demand setback was a cyclical event rather than a structural shift,” the group said.

“It will also examine the potential for long-term growth in industrial demand.”

Silver was trading around $29,50/oz on Tuesday.

Source:miningweekly