The price of silver fluctuates based on available supply versus fabrication demand, according to The Silver Institute. Within this basic premise, silver prices also rise and fall due to investors hedging risks against currency, the housing market's demand for copper, the consumer electronics industry, solar panel production and the price of gold, notes Investopedia. Silver fabrication demand indicates how many millions of ounces various industries need to maintain business, says The Silver Institute.
Industrial applications account for 56 percent of the overall physical demand for silver, according to The Silver Institute. China, India and Taiwan use large portions of the world's silver supply. Jewelry accounted for 215.2 million ounces of physical demand for silver in 2014. Over that same span, industrial fabrication needed 594.9 million ounces of the precious metal for electronic, soldering, photographic and photovoltaic applications. Overall, companies demanded 1.066 billion ounces of silver in 2014.
Silver mines supplied 877.5 million ounces of silver in 2014, notes The Silver Institute. Supplies of silver in 2014 came to 1.062 billion ounces, including scrap silver sales and net hedging supply. Companies had a net balance of 2.6 million ounces of silver.
Copper affects the silver industry since 26 percent of copper mines produce silver as well, says Investopedia. Therefore, the housing market affects the price of silver due to the rise and fall in demand for copper. Silver goes into circuits in consumer electronics, so any rise and fall in that industry also affects silver prices.