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SILVER


Introduction
A soft white precious univalent metallic element having the highest electrical and thermal conductivity of any metal; occurs in argentite and in free form; used in coins and jewelry and tableware and photography coins made of silver

Uses of Silver
Silver's unique properties include its strength, malleability, ductility, electrical and thermal conductivity, sensitivity to high reflectance of light and despite it being classified as a precious metal, its reactivity which is the basis for its use in catalysts and photography.

World Markets
  • London Bullion Market is the global hub of OTC (Over-The-Counter) trading in silver.
  • Comex futures in New York is where most fund activity is focused
Indian Scenario
  • Silver imports into India for domestic consumption in 2002 was 3,400 tons down 25 % from record 4,540 tons in 2001.
  • Open General License (OGL) imports are the only significant source of supply to the Indian market.
  • Non-duty paid silver for the export sector rose sharply in 2002, up by close to 200% year-on-year to 150 tons.
  • Around 50% of India's silver requirements last year were met through imports of Chinese silver and other important sources of supply being UK, CIS, Australia and Dubai.
  • Indian industrial demand in 2002 is estimated at 1375 tons down by 13 % from 1,579 tons in 2001. In spite of this fall, India is still one of the largest users of silver in the world, ranking alongside those Industrial giants, Japan and the United States.
  • By contrast with United States and Japan, Indian industrial offtake for fabrication in hardcore industrial applications like electronics and brazing alloys accounts for only 15 % and the rest being for foils for use in the decorative covering of food, plating of jewelry and silverware and jari.
  • In India silver price volatility is also an important determinant of silver demand as it is for gold.
World Silver Supply from Above-ground Stocks

Particulars 2001 2002
Implied Net Disinvestment -9.5 20.9
Producer Hedging 18.9 -24.8
Net Government Sales 87.2 71.3
Sub-total Bullion 96.6 67.4
Scrap 182.7 184,9
Total 279.3 252.3
All Figures are in Million Ounces

India Industrial Fabrication , 2002

Particulars Percentage
Pharmacy & Chemicals 22.4
Foil 9
Plating 13.7
Solders & Brazing 5.4
Electrical 13.5
Photography 0.85
Jari 17.1

Frequency Distribution of Silver London Fixing Volatility from 1995 till date

Percentage Change > 7% 5 - 7 % 3 - 5% <3%
Daily        
Number of times 7 10 85 2086
Percentage times 0.3 0.5 3.9 95.3
Weekly        
Number of times 9 15 50 363
Percentage times 21 3.4 11.4 83.1

Biggest Price Movement since 1995
Between February 4 - 6, 1998, daily prices rocketed by 22.3%, based on a noted US financier had accumulated nearly 130 ounces of physical silver. Note: Post September 1999 daily silver prices have shown more than 5% movement not once and weekly silver prices only once.
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