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One year ago, a report from the U.S. Department of Energy (DOE) on the global supply of essential PV module materials predicted possible disruptions for thin-film manufacturing.
The availability of indium, gallium and tellurium was examined in the context of current and future production needs, and the DOE found cause for concern. Indium and tellurium were pegged as especially vulnerable to supply tightness and price volatility, according to both the report and several market analysts at the time.
New Government Report Identifies Supply Risks For Thin-Film PV Materials” in the February 2011 issue of Solar Industry.)
Now, the DOE has released the
latest edition of its Critical Materials Strategy. Have the worries over thin-film PV materials supply eased? According to the DOE, the general supply-demand picture for indium, gallium and tellurium has “improved slightly,” but the situation is not entirely reassuring. The three metals are still highlighted (alongside neodymium and dysprosium) as clean-energy materials that face a “significant risk of supply chain bottlenecks in the next two decades.”
The report attributes the slight improvement primarily to decreased demand for the three thin-film materials: Although PV deployment is expected to grow, the requirements of the materials per module are expected to shrink.
For copper indium gallium diselenide (CIGS) modules, manufacturers are shifting to compositions with higher proportions of gallium and lower concentrations of indium, the DOE says. The result is a “partial trade-off in the potential for supply risk between the two elements.” At the same time, CIGS’ market share assumption has been reduced under the DOE’s new calculations, lowering projected demand for both indium and gallium.
Cadmium telluride (CdTe) thin-film modules currently account for approximately 10% of the PV market, according to the report. Declining silicon prices may threaten this slice of the market, but high tellurium costs and the increasing need for CdTe manufacturers to compete for supply with non-PV companies requiring tellurium continue to cause supply headaches.
“The cost of tellurium is a critical issue for CdTe solar cell makers, and the industry is working to lower material use and increasing recovery of new scrap to reduce reliance on primary tellurium,” the DOE says in the report.
Although short-term supply of tellurium appears adequate, future capacity increases may be insufficient to supply both CdTe manufacturing and the multitude of other manufacturing sectors that use tellurium. Under one scenario modeled in the report, tellurium supply would need to increase 50% more than its projected 2015 total in order to meet expected demand.
Indium and gallium have also experienced increased popularity in non-PV manufacturing uses, such as semiconductor applications, flat-panel displays, and coatings for smartphones and tablet computers. The DOE forecasts that as a result, supplies may run short by 2015 unless production of these materials is increased – or non-PV demand lessens.
Of the two metals, gallium poses more cause for concern, as the DOE has adjusted its assumptions of future gallium use under CIGS manufacturers’ expected manufacturing modifications.
“These higher estimates [of gallium requirements] are driven largely by the assumption that gallium will increasingly be substituted for indium in CIGS composition,” the DOE explains. This change points to the benefits of reducing material intensity in other aspects of PV manufacturing, such as reducing cell thickness and improving processing efficiency.
Overall, indium, gallium and tellurium all receive moderate scores (2 or 3 on a scale of 1 to 4) from the DOE with regard to both their importance to clean energy and short- and medium-term supply risk.
In order to help mitigate possible supply disruptions that could threaten the manufacturing and deployment of PV, as well as other types of clean energy, the agency has developed a three-pronged approach.
“First, diversified global supply chains are essential,” the DOE stresses in the report. “To manage supply risk, multiple sources of materials are required. This means taking steps to facilitate extraction, processing and manufacturing here in the United States, as well as encouraging other nations to expedite alternative supplies.”
The second strategy relies on developing alternatives to materials whose supply may be constrained. For PV, one DOE research program focuses on advancements in thin-film formulations such as copper-zinc-tin and sulfide-selenide. Another initiative funds research and development into PV inks based on earth-abundant materials such as zinc, sulfur and copper.
“Several projects also seek to use iron pyrite – also known as fool’s gold – to develop prototype solar cells,” the DOE notes in the report. “Pyrite is non-toxic, inexpensive, and is the most abundant sulfide mineral in the Earth’s crust.”
Finally, improving recycling and reuse mechanisms can reduce demand for new materials, the DOE says, adding that these strategies also can help improve the sustainability of manufacturing processes.
Photo: Enbridge Inc.’s 5 MW Tilbury solar project in Ontario uses First Solar’s cadmium telluride thin-film modules. Photo credit: Enbridge
Indium is heading for prices of more than $1000/kg, according to industry analyst firm NanoMarkets in a new report “Chinese Indium Strategies: Threats and Opportunities for Displays, Photovoltaics and Electronics”, which examines the impact on the electronics and related materials industries of recent Chinese policies to restrict the export of indium. Even higher prices have been suggested in the Chinese press â as much as $3000/kg.
China is the world’s largest supplier of indium by far, accounting for almost three-quarters of world reserves and about half of production. As such, its policies affect the markets for all indium-related electronic materials.
This activity has recently been formalized in a new Chinese five-year plan, which is designed to stimulate domestic Chinese high-tech industries. NanoMarkets claims that this move by the Chinese government will have significant negative implications for several classes of electronics products (in the areas of displays, lighting, photovoltaics, compound semiconductor chips, lead-free solders). The report therefore examines China’s evolving indium policy in both economic and political terms and explains how it will act as a catalyst for creating new growth opportunities in both the extraction industry and advanced electronic materials industries worldwide, looking especially at the impact on markets for novel transparent conductors and compound semiconductors.
In particular, high indium prices may force the conservative display industry to shift to ITO alternatives, especially those using nanomaterials, believes NanoMarkets.
Japanese indium users, who currently use 70% of China’s indium production, may find themselves without sufficient indium within a year. As a result, NanoMarkets expects firms in countries that have not been large suppliers of indium (including Australia, Canada, Laos and Peru) to rush into the market.
NanoMarkets also predicts that, for the first time, there will be significant amounts of indium extraction from sources other than zinc mines (e.g. sources such as tin and tungsten mining). The Chinese indium policy seems certain to incentivize new sources outside China to produce indium, either through primary extraction methods or through recycling/reclamation, the firm reckons.
Also, a sharp rise in the price of indium will harm the resurgent copper indium gallium (di)selenide (CIGS) photovoltaic (PV) industry, but in turn this will open the door for cadmium telluride (CdTe) and crystalline silicon (c-Si) PVs, which will become more price competitive, says NanoMarkets. In addition, new classes of absorber materials (zinc or tin) may emerge that are CIGS-like but don’t actually use indium.
20 Dec, 2010, 02.45AM IST, Vivek Kaul and Prashant Mahesh,ET Bureau
Silver: Brighter future than gold?
You’d probably laugh it off if someone claimed silver is the hottest metal, given gold’s runaway prices. Since the beginning of the year gold is up about 20%. Silver, in the same period, has given a whopping 60% return. “This relative outperformance will continue,” says Vijay Bhambwani, CEO, BSPLindia.com.
Silver price is at a 30-year high of $30 an ounce (Rs 45,665 per kg). Let us do a quick analysis to find out if you should invest in it.
Riding on high demand: Silver has more industrial applications than any other metal. A recent report by Hinde Capital says: “It’s the best conductor of both heat and electricity, the most reflective, and second-most ductile and malleable element, after gold.” The white metal is also being put to several new uses-water purification, air-handling systems and a natural biocide.
“New products using silver’s biocidal qualities are being developed each year; clothing, bandages, toothbrushes, door-knobs (flu-protection), keyboards, the list goes on,” Hinde Capital report points out.
On supply side, things are grim: Silver analyst Theodore Butler at Butler Research says, “Silver inventories are down from 10 billion ounce in 1940 to 1 billion ounce today. Gold inventories, in contrast, are up 4 billion ounce since 1940, according to World Gold Council.” The world has five times more gold than silver, he says. Though this may be extreme, it’s true that silver will soon become scarce. Jeff Nielson, editor, Bullionbullscanada.com says he would side with a more conservative 6:1 gold silver ratio. “This is small enough, given the 47:1 price ratio.”
Also even though the earth’s crust has 17.5 more silver than gold, production of silver cannot be ramped up overnight. Almost two-thirds of the silver that is mined comes as a byproduct from mining of metals like copper, lead and zinc. So it isn’t easy to ramp up production straight away. Data from the silver institute suggests silver mine production rose 4% to 709.6 million ounce in 2009.
No recycling of silver: Silver recycling isn’t always possible primarily because it is used in very small quantities as an industrial metal, and not always monetarily viable to recycle. Even at its current price, recycling doesn’t make sense. As Nielson pus it, “We must remember that virtually all the gold in the world has been conserved (recycled) because it’s high value economically justified recycling. So, may be when silver advances to somewhere between $50 and $100 an ounce, we should start to see much more recycling.”
High price in short and long term: Mismatch between price and demand makes silver a great long-term bet. “For most of the last 5,000 years, gold silver price ratio averaged 15:1. The current ratio of over 45:1 is unjustified and unsustainable,” says Neilson. The logic behind this is that silver is roughly 17 times more plentiful than gold (though its supply is rising at a lower pace). So with current gold price at about $1,400 an ounce, silver should be around $93 an ounce. That’s nearly three times silver’s current price. If market corrects this ratio and silver price rises to this level, it’s a huge bounty for investors. As Butler says, “I’ll be amazed if we don’t climb past $100 an ounce in the next three to five years. The amazing thing is, despite silver [prices] being up five times from its lows of about $4 an ounce, the current investment thesis is better than ever. That’s because silver is getting greater investor awareness.”
Prospects are high in the short term too. “In the next couple of months, silver could trade between Rs 46,000 and Rs 47,000 a kg,” says Rakesh Varasia, research officer, Indian Bullion Metal Association. “Inventories are so severely stressed that the next spike in 2011 will most likely take silver to or above $50 an ounce (about Rs 75,000 a kg),” adds Nielson.
Gold goes up, silver follows: Gold prices have been going up for a while given countries around the world either printing money or threatening to do so, leading to investors betting on gold. “Relentless debasing of fiat currencies will inflate gold further,” says Bhambwani of BSPLindia.com. His views are echoed by Ritesh Jain, head, fixed income at Canara Robeco Mutual Fund. “Silver is seen to be a poor cousin of gold. If gold prices rise, silver will follow closely,” he says.
How to buy silver: The simplest way is to buy silver is through silver exchange-traded funds. But they’re not available in India. You can always buy bars and coins but storing them can be a problem. The most practical solution is to buy e-silver. E-silver was launched recently by National Spot Exchange. This is similar to buying shares and holding them in a demat form.
National Spot Exchange has 370 brokers and 40 depository participants (DPs) empanelled on it. All you’ve to do is approach your broker and sign a client registration form, one-time cost of which is Rs 100. Annual depository maintainence charges could be between Rs 300 and Rs 600 a year.
Whenever you transact, the brokerage charge is between 0.25% and 0.50%, and depository transaction fee is Rs 25-50 per transaction. For physical delivery of the metal, you have to pay Rs 200. Currently silver is delivered at National Spot Exchange centres in Delhi, Mumbai and Ahmedabad.
But even in this case, investors need to be careful not bet all their money on silver. “Since silver is a volatile commodity, retail investors should invest through the systematic investment plan route,” says Karun Verma, senior research analyst, Religare Commodities.