Another key driver for 2010 will be the advent of new market places for silver, including pent-up demand for silver-zinc batteries in ‘smart’ automobiles and an array of portable electronic devices, Parikh says.

In fact, the widespread adoption of silver-zinc batteries is going to be “one of the major drivers behind a rise in prices because it may absorb a lot of silver,” he adds. Though this important new application for silver might not necessarily become a major factor in demand for silver as early as next year, it promises to become a very sizeable marketplace, he suggests. And especially for automobiles.

Notably, China is forecast to become a huge adopter of electric cars to curtail its rising dependence on foreign oil and to reduce its air pollution. In fact, electric cars and hybrid plug-ins will account for more than half the auto market in China by 2020, according to Dr. Wolfgang Bernhart, an auto industry expert with the international think tank, Roland Berger.

Furthermore, silver-zinc batteries are destined to generate major market share as they are said to be much safer, more environmentally-friendly and far more energy-efficient than lithium-ion batteries (which currently dominate the markets for smart cars and portable electronics).

Also, the ever-expanding industrial sector for silver now includes LCD/plasma television screens, solar panels, water purification and even medical and superconductivity applications. It is also finding a critical new use in biocides (which use silver in chemical agents to kill dangerous bacteria, including superbugs).

GFMS, a renowned London precious-metals consulting firm, concurs that overall fabrication demand (which also includes the photography, jewelry silverware sectors) is expected to rebound to “normal levels” in 2010. And the emergence of key new markets for silver is sure to help power this recovery, according to Neil Meader, research director at GFMS.

“It is becoming an increasingly industrial metal and novel new uses will also likely assist the recovery in silver’s demand,” he says.