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Solar remains a bright spot for silver demand

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Solar remains a bright spot for silver demand Silver demand for solar panels is a growing segment of its industrial demand with record levels expected in

Investment Insights Solar remains a bright spot for silver demand

Highlights

  • Silver demand for solar panels is a growing segment of its industrial demand with record levels expected in 2018.
  • Economies of scale and falling costs may make economics a key driver for growing US solar market beyond policy.
  • International solar usage may spur growth amid climate controls and growing energy needs in India and China.

Global silver demand for solar set to rise

Silver’s unique reflective and conductive properties make it a key component in capturing and generating electricity through sunlight. The fastest growing industrial segment for silver has been its use in photovoltaic (PV) panels for solar energy. This has resulting in demand for solar PV usage becoming a key component for the silver market.

Global solar PV annual installed capacity is expected to steadily rise reaching 112 gigawatts by 2021, with a cumulative increase in PV electricity capacity of 506 gigawatts over the next 5 years (2016-2021) according to GTM Research. This should boost silver demand, which uses about 2/3 ounce of metal per PV panel.

According to a recent study, CRU Consulting estimates strong growth in silver PV demand over the next 5 years with an annual average of 114 million ounces. Peak consumption of 148 million ounces is forecast in 2018 – about twice that of 2015 demand.

In response to silver’s 2011 price rally, a trend of thrifting has emerged among PV panel manufacturers. This trend of substituting the precious metal for less costly alternatives like copper, however, appears to have stabilized. Additionally, a lower amount of silver in each panel is likely to be offset by the anticipated rise in volume.

New technologies aimed at replacing silver-reliant silicon PV panels for other materials is a risk but silver’s unique properties and process stability will likely keep it preferred among manufacturers.

Economics trump policy for US solar energy industry?

With the Trump administration’s America First Energy Plan lacking any mention of renewable energy, many are questioning the outlook for US solar energy and the impact for silver demand. Policy and tax incentives remain important catalysts, but falling costs from improving technology coupled with rising economies of scale will likely grow as a determining factor as well.

In 2016, US solar PV capacity rose 95% to a record 14,626 megawatts as average panel costs continued to fall from $0.56 to US$0.36/watt. This, along with technology and battery advancements, has helped improve solar’s economic viability.

New electricity being built and installed in US continued its shift last year to three major sources: solar, natural gas, and wind. According to the US Energy Information Administration, the levelled cost of energy (LCOE) – a primary cost metric for the utility industry- has seen a 40% cost reduction in solar. The LCOE for solar PV fell from US$130/megawatt (MWh) in 2014 to US$74/MWh in 2016 making headway against coal ($95/MWh), natural gas (US$56/MWh), and wind (US$59/MWh). A major component of solar’s competitiveness, however, has been the Investment Tax Credit (ITC), which if taken into account lowers solar PV’s 2016 LCOE to US$58/MWh in line with other fuels.

Electricity generation in the US

Part of last year’s record surge in US PV capacity was due to the anticipated halt of the solar ITC at year-end. The ITC, however, was extended through 2019 at the 30% level with step down rates until 2021 before expiring. While Trump’s tax reform plan is still unclear, changes to the ITC are unlikely a battle worth fighting for the administration as they are due to unwind beginning in 2019.

Additionally, a major focus of the Trump administration has been jobs of which the US solar industry created an estimated 51,000 in 2016. According to a report by the Solar Foundation, they also estimate the US solar industry currently employs 260,000 workers – a bulk of which related to residential installations. Further, potential near term adjustments to the current ITC may spur immediate demand to take advantages of these benefits before the window closes as we saw in 2016.

Solar’s growth anchored outside US

Looking beyond the US, solar’s prospects remain bright. Following the 2015 Paris Accords, the international community has made headway in reducing emissions to which solar PV remains a key component along with other renewable energy sources.

China, the leader in solar energy, continues to grow its clean energy initiatives by expanding its solar PV capacity. According to its National Energy Administration, China doubled its PV capacity in 2016 to over 77 gigawatts. India has also looked to solar to meet the rising energy demand from a growing and modernizing population. In a recent union budget speech by the Minister of Finance, the government plans to move forward with solar park programs generating a potential capacity of 40 gigawatts under both phases.

Other countries led by Mexico, France, Australia, Brazil, and the Philippines are also anticipated to ramp up solar energy capacity in the next five years. These emerging solar markets are expected to equate China’s total solar energy capacity increase.

Expected cumulative global PV installations by country (2016-2021).

Precious Metals Outlook: Silver

As outlined in our October report, Gold and silver: similar but different, silver’s drivers in addition to gold are producer price inflation, changes in silver supply, and industrial production. A combination of higher inflation, a weakening US dollar (in first half of year) and improving manufacturing growth is likely to see silver prices trade in the US$20-22/ounce range in 2017.

Global Manufacturing PMI at 52.7 (above the long-term average of 51.4 and sitting at a 34-month high) indicates manufacturing activity will continue to pick up this year. We believe global PMI manufacturing will continue to improve, although the pace of growth will slow as we approach a 6-year high of 55 at the year-end.
After reaching a decade high in December 2016, we expect COMEX silver inventory to fall 17% by the end of 2017 back to the levels seen at the beginning of 2016 as mining capital expenditure has continued to slide. Additionally, we factor an 18-month lag to this input into our model reflecting the time it takes forgone investment to bite into supply. As mining capital expenditure and investment continues to decline this should further weigh on silver supply, which has been in a supply deficit for the past 11 years.

Important Information

The analyses in the above tables are purely for information purposes. They do not reflect the performance of any ETF Securities’ products . The futures and roll returns are not necessarily investable.

General

This communication has been provided by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).

This communication is only targeted at qualified or professional investors.

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Fastställd utdelning i XACT Sverige 2025

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Utdelningsbeloppet i rubricerad börshandlad fond, legalt namn XACT Sverige (UCITS ETF), har fastställts till totalt SEK 25,10 per fondandel. Fastställd utdelning i XACT Sverige 2025.

Utdelningsbeloppet i rubricerad börshandlad fond, legalt namn XACT Sverige (UCITS ETF), har fastställts till totalt SEK 25,10 per fondandel. Fastställd utdelning i XACT Sverige 2025.

De som är registrerade fondandelsägare i fonden på avstämningsdagen erhåller utdelning.

Schema för utdelning i fonden är följande:

9 juni Sista dag att handla fondandelar inklusive rätt till utdelning

10 juni Ex-dag; fondandelarna handlas utan rätt till utdelning

11 juni Avstämningsdag

16 juni Utbetalningsdag

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Fastställd utdelning i XACT Norden Högutdelande 2025

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Utdelningsbeloppet i rubricerad börshandlad fond, legalt namn XACT Nordic High Dividend Low Volatility (UCITS ETF), har fastställts till totalt SEK 7,48 per fondandel. Fastställd utdelning i XACT Norden Högutdelande 2025.

Utdelningsbeloppet i rubricerad börshandlad fond, legalt namn XACT Nordic High Dividend Low Volatility (UCITS ETF), har fastställts till totalt SEK 7,48 per fondandel. Fastställd utdelning i XACT Norden Högutdelande 2025.

SEK 1,87 delas ut i mars, maj, september och november.

De som är registrerade fondandelsägare i fonden på avstämningsdagen erhåller utdelning.

Schema för utdelning i fonden är följande:

Utdelning 1 – SEK 1,87

10 mars Sista dag att handla fondandelar inklusive rätt till utdelning i XACT Norden Högutdelande 2025 mars

11 mars Ex-dag; fondandelarna handlas utan rätt till utdelning

12 mars Avstämningsdag

17 mars Utbetalningsdag

Utdelning 2 – SEK 1,87

12 maj Sista dag att handla fondandelar inklusive rätt till utdelning i XACT Norden Högutdelande

13 maj Ex-dag; fondandelarna handlas utan rätt till utdelning

14 maj Avstämningsdag

19 maj Utbetalningsdag

Utdelning 3 – SEK 1,87

8 sep Sista dag att handla fondandelar inklusive rätt till utdelning

9 sep Ex-dag; fondandelarna handlas utan rätt till utdelning

10 sep Avstämningsdag

15 sep Utbetalningsdag

Utdelning 4 – SEK 1,87

10 nov Sista dag att handla fondandelar inklusive rätt till utdelning

11 nov Ex-dag; fondandelarna handlas utan rätt till utdelning

12 nov Avstämningsdag

17 nov Utbetalningsdag

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Crypto’s big week in Washington: Preparing for a crypto-friendly US

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Last week was monumental for Bitcoin and the broader crypto ecosystem, ushering in key regulatory and legislative developments in the US. These changes not only underscore a shifting attitude toward digital assets in the US but also lay the groundwork for greater clarity and legitimacy for crypto globally in the years to come. Following are the five reasons we think last week was such a defining moment for crypto assets and why we think the current environment is setting this asset class up for a remarkable 2025.

Last week was monumental for Bitcoin and the broader crypto ecosystem, ushering in key regulatory and legislative developments in the US. These changes not only underscore a shifting attitude toward digital assets in the US but also lay the groundwork for greater clarity and legitimacy for crypto globally in the years to come. Following are the five reasons we think last week was such a defining moment for crypto assets and why we think the current environment is setting this asset class up for a remarkable 2025.

  1. A paradigm shift at the SEC
  2. One of the most significant signals of change came from US Securities and Exchange Commission (SEC) Acting Chair Mark Uyeda, who announced the establishment of a Crypto Task Force led by Commissioner Hester Peirce, affectionately known as ”Crypto Mom” for her engagement in the digital asset space while at the SEC. The task force, along with the favorable views on digital assets from incoming chair Paul Atkins, reflects an important step toward ending the contentious practice of ”regulation by enforcement,” which has long stymied innovation for crypto entrepreneurs and limited opportunity for US investors.
  3. The SEC’s subsequent decision to rescind Staff Accounting Bulletin (SAB) 121, which imposed restrictive accounting guidelines on banks wishing to custody crypto, further underscores the regulatory shift. Its repeal not only provides operational relief but also signals a more pragmatic approach to crypto oversight.
  4. These regulatory moves reflect a broader recognition by US authorities of the need for a framework that fosters innovation while ensuring investor protection. They set the stage for a future where digital assets are more seamlessly integrated into the financial system.
  5. New congressional leadership

Another pivotal development was the appointment of Senator Cynthia Lummis as chair of the newly created Subcommittee on Digital Assets. Lummis, a long-time advocate for Bitcoin and blockchain technology, is uniquely positioned to champion legislation that promotes innovation while addressing key concerns around market integrity and consumer protection.

Her leadership comes at a critical time, as Congress considers landmark legislation such as the Stablecoin Act and the Bitcoin Act. The Stablecoin Act, which could see approval this year, aims to establish clear guidelines for stablecoin issuance and use. Meanwhile, the Bitcoin Act proposes an audacious goal: for the US government to accumulate 5% of bitcoin’s total supply. There are obstacles to this proposal, some of which I noted in August last year, but if enacted, this legislation could significantly impact Bitcoin’s global adoption and price trajectory.

  1. A game-changing executive order

The White House also contributed to the week’s momentum with a new executive order aimed at shaping the future of digital assets in the US. A key aspect of this order is its rejection of a Central Bank Digital Currency (CBDC) in favor of fostering stablecoin development. President Trump has been vocal about his preference for implementing a ”digital dollar” on top of open blockchain networks, a move that aligns with crypto’s decentralized ethos.

This executive order also signals the end of ”Operation Chokepoint,” an informal campaign that had effectively debanked parts of the crypto industry. By reaffirming the importance of open networks and stablecoins, the administration is providing a clear direction for the role digital assets could play in the US financial system.

Perhaps the most intriguing development is the proposal to establish a government stockpile of digital assets. While the term “stockpile” has been carefully chosen over “reserve” to avoid direct comparisons with traditional currency reserves, the implications are nonetheless profound. The working group tasked with studying this proposal has expanded its scope beyond bitcoin to include crypto assets more broadly.

While it’s too early to predict how or whether the stockpile will be established, the study represents a thoughtful approach to a high-stakes decision. It could mark the beginning of a global trend, with other nations potentially racing to stockpile crypto assets as part of their sovereign holdings, which we’ve already seen this week with the Czech central bank.

  1. Steps toward a comprehensive regulatory framework

The week’s developments also highlight the ongoing evolution of regulatory characterization. US regulators are moving toward a more nuanced understanding of digital assets, which is essential for crafting effective policies. This trend was echoed in the revocation of SAB 121 and the growing momentum behind legislation like the Stablecoin Act. Additionally, the broader regulatory framework for market structure in digital assets, which could happen this year or next, will likely address issues ranging from trading practices to asset classification. These steps indicate a deliberate effort to integrate crypto into the financial system with precision and clarity.

  1. The start of a geopolitical race to embrace crypto

These developments, particularly the possibility of a US crypto stockpile, also raises the stakes on the global stage. Sovereign states accumulating crypto assets could lead to a new form of economic competition, where digital assets play a central role in national strategy.

The US government’s interest in studying this proposal reflects an understanding of crypto’s growing significance in global finance. It also aligns with the nation’s broader goals of maintaining technological and economic leadership.

What’s next?

The developments of the past week are part of a broader trend of increasing institutional and governmental recognition of crypto’s potential. However, several key milestones remain on the horizon:

Stablecoin Act Approval: This legislation, which could happen before the fourth quarter this year, will provide much-needed clarity for stablecoin issuers and users.

• Market Structure Framework: Expected by 2026, this framework will define the rules of engagement for trading and investing in digital assets.

• Bitcoin Act Progress: If the US government begins accumulating bitcoin, it could have profound implications for the asset’s supply dynamics and global adoption.

• Stockpile Study Results: The findings of the crypto stockpile working group could shape the long-term digital asset strategy in the US.

As these milestones approach, bitcoin and other crypto assets are likely to experience heightened volatility, but also greater legitimacy. Investors, policymakers, and innovators will continue to pay attention to these developments, as they could define the future of the global economy. While challenges remain, the direction is clear: crypto is moving from the fringes of finance to center stage. As these changes unfold, the crypto ecosystem is poised to evolve into a more robust and integral part of the global economy, presenting investors with attractive opportunities to get broad exposure to this emerging asset class.


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