Silver Price Rise May Hit Indian Demand In 98

Indian demand for silver could plummet to about 2,000 tonnes in 1998 from this years 3,850 if the world spot market price continues buoyant, a senior industry official said on Wednesday.

Next year if prices remain at levels between $6-7 per ounce then annual demand may come down to 2,000 tonnes in 1998, M L Damani, President of the Bombay Bullion Association Ltd told Reuters by phone.

Silver opened on Wednesday at $6.29/6.32 compared with its previous close of $6.18/6.20 in London and New Yorks $6.24/6.26, the highest level since January 1989. Damani said Indians would think of exports only if the prices zoom to $12-15 an ounce, and after local demand was met. Unless the prevailing prices in the international market get doubled there is no possibility of exporting silver, he said.

 

India exported silver from public holdings between 1963 and 1984.

Analysts said the big worry was Indian consumption next year. At some point prices in the West could reach such high levels that India will start to export silver again, said Merrill Lynch analyst Ted Arnold in New York.

Indian silver imports in the first nine months of 1997 were 3,405 tonnes, up from 3,205 tonnes in the same period of 1996, according to consultants CRU international.