Exclusive: China Dominates The Solar Silver Supply-Chain

Backdrop: Big Picture Trends and Silver

Authored by Bai Xiaojun and Vincent Lanci via GoldFix

From a high level we know there are secular trends gripping global markets and industry. Here are some of those trends

• Commodity Collateral shortages- East to west1
• Technology Embargoes- West to east
• Supply-Chain Restructuring- Brics and G7
• Complexity collapse/ Deglobalization- Globally
• Monetary Multipolarity- Globally but agressively by BRICS
• Net-Zero Energy Transition- Globally but by G7 aggressively

These backdrop issues serve to exacerbate the emerging problem surrounding our global Silver Supply/Demand imbalances. Therefore, a healthy examination of China's Photovoltaic (Solar) industry can give insight into how these emerging trends are manifesting in Silver itself.

Sections:

1. Purpose
2. China’s Solar Silver Supply-Chain
3. What is the Silver Value-Chain?
4. Value-Chain (Sweet Spot) Analysis
5. What Else the Value Chain Says
6. SOLAR CELLS> SOLAR PANELS
7. PASTE>
8. POWDER>
9. Bottom Line: China Not Likely an Exporter
10. Addendum: Not Enough Supply, Too Much Demand
11. About the Authors
12. Original PDFs

1- Purpose

Having gotten somewhat of a handle on Silver supply, the purpose of this piece is to break down China’s Solar Supply-Chain to better understand where demand trends. In doing so we will also answer a question surrounding trends in China’s import/export matrix. Part 1 was entitled Not All Silver is the Same.

2- China’s Solar Silver Supply Chain

Silver is pulled out of the ground. It gets refined. It gets put into solar panels. The panels get installed. This is the supply chain.Greatly Simplified, this is China’s Photovoltaic Silver Supply-Chain:

• Mining>Refining>Solar Panel Creation> Panel installation

In our previous piece we discussed the mining portion of the Supply-Chain above. That helped us understand industrial supply issues. To summarize it here: based on proven reserves at current consumption rates due to net-zero energy applications, Silver will be in short supply in as little as 5 years.

In terms of Supply-chain analysis , that covers the “Mining” section in the above flow.

This piece will be about the portion of the supply-chain schematic above between Mining and installation. This is where Silver gets fabricated into Solar panels and is referred to commonly as the Value-added section of the chain or Value-chain.

The value-added parts of this supply chain (as in most chains) are the middle parts in CAPS below

• Mining>REFINING>SOLAR PANEL CREATION> Panel installation

Here are all those sections broken out in more detail…

3- What is the Silver Value-Chain?

We can differentiate between Supply-Chain and Value-Chain this way:

The main difference between a value chain and a supply chain is that the supply chain deals with building the product and getting it to the consumer, while the value chain looks for ways to enhance the product's value as it moves along that supply chain.

Value chains are sufficiently complex enough to get their own focus. But it is helpful to understand that in general, as Bai reminded us, save for the assembly of panels, almost the whole supply chain in Silver is the refinement process. Value-Chains are that part of the supply chain that add value to the raw material to be made into a product. There can be services and other abstract logistics as well. But for our purposes in discussing Silver, refinement and final assembly are the Silver value-chain

• Part 2 tomorrow

Continues here