Appetite for silver at all-time high

Demand rises 13% in 2013, driven by 76% rise in retail investment in bars and coins; growth in industrial demand muted

Global for rose 13 per cent in 2013 to an all-time high, driven primarily by a 76 per cent increase in retail investment in bars and coins, coupled with a sturdy recovery in jewellery and silverware fabrication.

Data compiled by a leading New York-based research agency, The Institute, showed total for at a record 1,081 million ounces (Moz) or 30,649 tonnes in 2013, as compared to 954.4 Moz or 27,057 tonnes the previous year. “The largest component of physical demand, industrial applications, dipped by less than one per cent, to 586.6 Moz, to account for 54 per cent of total demand. Asia,however, experienced a three per cent increase in industrial demand, led by China, where a continued recovery in the electrical and electronics sector, along with gains in the ethylene oxide industry, took total Asian industrial offtake to a new high. Japan also experienced gains in industrial demand,” The Institute said, in its latest annual report.

In India, overall sentiment remained favourable for silver, at the expense of gold. The latter faced reduced supply through official channels, on several restricting measures adopted by the government. An example is the 80:20 rule, under which at least 20 per cent of every imported gold lot had to be supplied to jewellery exporters. Consequently, India’s import surged  180 per cent in 2013 to around 5,500 tonnes, the highest ever. Earlier, India had surpassed the 5,000-tonne mark for import only in 2008, when the jewellery industry was at a peak.

“Consumers are planning in advance for future use of silverware and ornaments, due to low prices. Since the price has been lower for long, consumers are booking in huge quantities, raising overall demand,” said Rahul Mehta, managing director, Emporium, a city-based leading manufacturer of artifacts.

Last year’s recovery in jewellery fabrication was a reflection of the improved economic outlook in the industrialised world, which lifted consumer confidence and retail sales for a 10 per cent increase in jewellery demand. Global silverware fabrication rose 12 per cent to a three-year high, due to strong gains in India and China, while photography demand slipped seven per cent in 2013, posting the slowest percentage decline in nine years. On the supply side, scrap fell 24 per cent, the largest drop on record. mine production grew by 3.4 per cent to reach 819 Moz.

A large portion of the growth is attributable to the primary mining sector, which experienced strong growth from the start, along with the ramp-up of operations that entered production in recent years. Primary mine production grew six per cent, and accounted for 29 per cent of global mine supply. Mexico was the world’s leading producer, followed by Peru, China, Australia and Russia. Primary mine cash costs were $9.27 an oz, up one per cent in dollar terms. The producer hedge book was aggressively reduced last year to stand at 15 Moz on a delta-adjusted basis.

 Scrap supply to the market in 2013 experienced the largest year-on-year reduction since the 1980s, due to a combination of softer prices and an exhaustion of “distressed” coin and jewellery recycling. The price of averaged $23.79 an oz in 2013, the third highest nominal average price on record, in a particularly volatile year for the entire complex.

image
Business Standard
177 22
Business Standard

Appetite for silver at all-time high

Demand rises 13% in 2013, driven by 76% rise in retail investment in bars and coins; growth in industrial demand muted

Dilip Kumar Jha  |  Mumbai 



Global for rose 13 per cent in 2013 to an all-time high, driven primarily by a 76 per cent increase in retail investment in bars and coins, coupled with a sturdy recovery in jewellery and silverware fabrication.

Data compiled by a leading New York-based research agency, The Institute, showed total for at a record 1,081 million ounces (Moz) or 30,649 tonnes in 2013, as compared to 954.4 Moz or 27,057 tonnes the previous year. “The largest component of physical demand, industrial applications, dipped by less than one per cent, to 586.6 Moz, to account for 54 per cent of total demand. Asia,however, experienced a three per cent increase in industrial demand, led by China, where a continued recovery in the electrical and electronics sector, along with gains in the ethylene oxide industry, took total Asian industrial offtake to a new high. Japan also experienced gains in industrial demand,” The Institute said, in its latest annual report.


In India, overall sentiment remained favourable for silver, at the expense of gold. The latter faced reduced supply through official channels, on several restricting measures adopted by the government. An example is the 80:20 rule, under which at least 20 per cent of every imported gold lot had to be supplied to jewellery exporters. Consequently, India’s import surged  180 per cent in 2013 to around 5,500 tonnes, the highest ever. Earlier, India had surpassed the 5,000-tonne mark for import only in 2008, when the jewellery industry was at a peak.

“Consumers are planning in advance for future use of silverware and ornaments, due to low prices. Since the price has been lower for long, consumers are booking in huge quantities, raising overall demand,” said Rahul Mehta, managing director, Emporium, a city-based leading manufacturer of artifacts.

Last year’s recovery in jewellery fabrication was a reflection of the improved economic outlook in the industrialised world, which lifted consumer confidence and retail sales for a 10 per cent increase in jewellery demand. Global silverware fabrication rose 12 per cent to a three-year high, due to strong gains in India and China, while photography demand slipped seven per cent in 2013, posting the slowest percentage decline in nine years. On the supply side, scrap fell 24 per cent, the largest drop on record. mine production grew by 3.4 per cent to reach 819 Moz.

A large portion of the growth is attributable to the primary mining sector, which experienced strong growth from the start, along with the ramp-up of operations that entered production in recent years. Primary mine production grew six per cent, and accounted for 29 per cent of global mine supply. Mexico was the world’s leading producer, followed by Peru, China, Australia and Russia. Primary mine cash costs were $9.27 an oz, up one per cent in dollar terms. The producer hedge book was aggressively reduced last year to stand at 15 Moz on a delta-adjusted basis.

 Scrap supply to the market in 2013 experienced the largest year-on-year reduction since the 1980s, due to a combination of softer prices and an exhaustion of “distressed” coin and jewellery recycling. The price of averaged $23.79 an oz in 2013, the third highest nominal average price on record, in a particularly volatile year for the entire complex.

RECOMMENDED FOR YOU

Appetite for silver at all-time high

Demand rises 13% in 2013, driven by 76% rise in retail investment in bars and coins; growth in industrial demand muted

Demand rises 13% in 2013, driven by 76% rise in retail investment in bars and coins; growth in industrial demand muted
Global for rose 13 per cent in 2013 to an all-time high, driven primarily by a 76 per cent increase in retail investment in bars and coins, coupled with a sturdy recovery in jewellery and silverware fabrication.

Data compiled by a leading New York-based research agency, The Institute, showed total for at a record 1,081 million ounces (Moz) or 30,649 tonnes in 2013, as compared to 954.4 Moz or 27,057 tonnes the previous year. “The largest component of physical demand, industrial applications, dipped by less than one per cent, to 586.6 Moz, to account for 54 per cent of total demand. Asia,however, experienced a three per cent increase in industrial demand, led by China, where a continued recovery in the electrical and electronics sector, along with gains in the ethylene oxide industry, took total Asian industrial offtake to a new high. Japan also experienced gains in industrial demand,” The Institute said, in its latest annual report.

In India, overall sentiment remained favourable for silver, at the expense of gold. The latter faced reduced supply through official channels, on several restricting measures adopted by the government. An example is the 80:20 rule, under which at least 20 per cent of every imported gold lot had to be supplied to jewellery exporters. Consequently, India’s import surged  180 per cent in 2013 to around 5,500 tonnes, the highest ever. Earlier, India had surpassed the 5,000-tonne mark for import only in 2008, when the jewellery industry was at a peak.

“Consumers are planning in advance for future use of silverware and ornaments, due to low prices. Since the price has been lower for long, consumers are booking in huge quantities, raising overall demand,” said Rahul Mehta, managing director, Emporium, a city-based leading manufacturer of artifacts.

Last year’s recovery in jewellery fabrication was a reflection of the improved economic outlook in the industrialised world, which lifted consumer confidence and retail sales for a 10 per cent increase in jewellery demand. Global silverware fabrication rose 12 per cent to a three-year high, due to strong gains in India and China, while photography demand slipped seven per cent in 2013, posting the slowest percentage decline in nine years. On the supply side, scrap fell 24 per cent, the largest drop on record. mine production grew by 3.4 per cent to reach 819 Moz.

A large portion of the growth is attributable to the primary mining sector, which experienced strong growth from the start, along with the ramp-up of operations that entered production in recent years. Primary mine production grew six per cent, and accounted for 29 per cent of global mine supply. Mexico was the world’s leading producer, followed by Peru, China, Australia and Russia. Primary mine cash costs were $9.27 an oz, up one per cent in dollar terms. The producer hedge book was aggressively reduced last year to stand at 15 Moz on a delta-adjusted basis.

 Scrap supply to the market in 2013 experienced the largest year-on-year reduction since the 1980s, due to a combination of softer prices and an exhaustion of “distressed” coin and jewellery recycling. The price of averaged $23.79 an oz in 2013, the third highest nominal average price on record, in a particularly volatile year for the entire complex.
image
Business Standard
177 22

LIVE MARKET

BSE

  ( %)

NSE

  ( %)

More News

  • Disseminate prices via SMS, Sebi tells commodity bourses Disseminate prices via SMS, Sebi tells commodity bourses
  • BSE500 index nears lifetime high BSE500 index hits lifetime high

STOCK WATCH

Company Price() Chg(%)
H T Media 88.30 12.41
Dr Lal Pathlabs 1004.05 8.85
G M D C 98.15 8.27
Oriental Bank 124.05 7.82
Yamini Invest 39.70 7.30
> More on BSE Gainers
Company Price() Chg(%)
Oriental Bank 124.00 7.92
G M D C 97.85 7.88
Jubilant Life 543.80 6.81
Radico Khaitan 103.05 6.73
Allahabad Bank 84.00 6.67
> More on NSE Gainers
Company Price() Chg(%)
R C F 47.10 -5.23
Welspun India 46.75 -4.10
Den Networks 80.90 -3.86
Trident 56.00 -3.45
Bharti Airtel 332.10 -2.82
> More on BSE Gainers
Company Price() Chg(%)
R C F 47.15 -5.23
Den Networks 80.90 -3.75
Welspun India 46.65 -3.72
Trident 55.90 -3.70
Whirlpool India 924.95 -3.16
> More on NSE Gainers
Widgets Magazine
Widgets Magazine
Widgets Magazine

Derivatives

Index
Instrument Type
Expiry Date
Option Type
Strike Price

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard