NEW YORK (TheStreet) -- Pan American Silver(PAAS) - Get Report CEO Michael Steinmann appeared on CNBC's "Squawk Box" Wednesday, to talk about why silver is up by 44% this year, while gold is only up by 28%, despite both being safe havens for investors. 

Pan American Silver, the second largest silver producer in the world, is up over 220% since the beginning of the year, Steinmann said. 

"Silver is a bit different metal than gold. Both have the safe haven aspect, but we use a lot of silver in the world," particularly in electronics and solar panels, Steinmann explained. About 10% of all silver produced is used for the production of solar panels, he said.  

Just 30% of silver production is by primary silver producers, with the other 70% being a by-product from copper, lead and zinc production, Steinmann noted. 

The Federal Reserve's decision to potentially raise interest rates will have an immediate affect on silver in the short term, Steinmann admits, because silver is non-interest paying and struggles to compete with assets that bear a yield when the agency hikes interest rates. However, silver is "on the way up" in the long-term, he asserted.

Currently, silver has about one billion ounces of demand, he said.

When the world went digital, silver experienced a "huge loss" in demand, but has "made up the loss and some" with electronics, Steinmann said. 

"Every phone, every screen, every light switch contains silver," he said. 

For the future, a focus on clean energy will help boost silver prices, Steinmann predicted. 

"The future world will be electric cars, and electric cars will need to find sustainable ways to produce that electricity," he concluded. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Pan American Silver as a Hold with a ratings score of C. The primary factors that have impacted the team's rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 

You can view the full analysis from the report here: PAAS

Image placeholder title


data by