Silver Prices and Lead Free Solder Facts

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The rising cost of silver.

Silver Prices and Lead Free Solder Facts
There has been a steady rise in all commodity prices. Silver pricing has been crazy, both in price and in volatility. You can monitor these prices at www.kitco.com

In Lead free solder bar and paste the most common alloy is SAC305. SAC305 contains 96.5% tin, 3% silver, and 0.5% copper. Copper has been relatively stable, but both Tin and Silver are nearly double the cost year over year. The metal in a jar of solder paste costs 186% of what is was 12 months ago. Solder paste is not a high margin product, bar solder is even less so. The suppliers of solder paste are frantically trying to pass some of the cost through. Normally manufacturers absorb cost variations, but with this abrupt escalation, most are now behind and suffering compressed margins or worse – losses.

Customers in the electronics industry are seeing this in price adjustments. They come in two basic forms 1) price increases and 2) metals surcharges. Because Tin is the bulk of the material, it overwhelms the affect of the Silver, but Tin is very difficult to replace. Silver can be reduced, and many companies are looking at SAC105. SAC105 contains 98.5% tin, 1% silver, and 0.5% copper, a two percent Silver reduction. The cost reduction is not dramatic, but it is a step in the right direction. The SAC105 alloy will deliver improved reliability to stress and vibration.

There are few ways to avoid these commodity costs. To add to the problems, most distributors, manufacturers and users are carrying minimal stock levels (Not wanting to have inventory when prices start to fall). The good news is that in the recent past, there has been some signs of metals topping out. As of this writing, Gold, and Silver prices are down about 5%. Tin is not tracking with these two metals and did not drop as much.

So what is a solder paste user to do? There is not much that you can do, but the following:

What does the future hold? Predictions are difficult, but after a small break, the trend is up. Energy costs are also tracking with metals, and have pulled back, but the long term trend is up. Inflation, a recovering economy with increased demand and a limited supply all indicate upward price pressure