Silver bar
Send this article to a friend
Print this page

If you want to share this article, simply sign into one of these sites and select your network. It’s that easy Click here to find out more about how to use this button

Average silver price seen rising in 2008
Allan Seccombe
Posted: Wed, 07 May 2008

[miningmx.com] -- DEMAND for silver by fabricators crept up one percent to 843.7 million oz in 2007, with industrial applications being the key driver as the average price for the metal hit a 27-year high, The Silver Institute said on Wednesday.

In a report researched by London-based metals consultancy GFMS, silver averaged $13.75/oz, a level last seen in 1980, but the price failed to deter growth in industrial demand for the metal.

Silver was last trading around $16.54.

The price could come close to an average $17 in 2008, GFMS chairman Philip Klapwijk told Thomson Financial News.

“If gold has another good run at $1,000 an ounce, it would be hard not to see silver hitting $20 an ounce,” said Klapwijk. “On the other hand, should gold correct beneath $800 an ounce, then you could possibly see silver drop back below $15 an ounce.”

Demand for silver in industrial applications increased for the sixth-year running, rising seven percent to 455.3 million oz, making up 54% of the total fabrication use of 843.7 million oz.

“In fact, in the period since the technology-related slump in 2001, industrial applications have added an impressive 120.1 million oz to silver demand,” the World Survey 2008 said.

Click Here to subscribe to our daily newsletter
The electronics sector was the main driver of this demand, breaking through the 200 million oz level for the first time, it added.

India, China and the United States accounted for 70% of industrial demand.

Investor demand for the metal has also been an important driver of the price, the Survey noted.

“A key development in silver’s recent fortune has been the pronounced shift in investor behaviour, witnessed b the continued presence of investors on the demand side of the equation since 2004,” it said.

The Barclays Global Investors iShares Silver Trust exchange-traded fund has built up more than 180 million ounces since its launch in 2006.

“This year (2008) investors have driven silver to fresh highs, with the metal’s price in March 2008 exceeding the $20 level over several days.”

Mined silver supply climbed four percent last year to 670.6 million oz, with primary mine supply rising 11% to make up a third of all mined silver.

Scrap silver slipped three percent to 181.6 million oz because of reduced recycling in India.

Producers cut their hedge positions by 25 million ounces, a 30 percent reduction.