Silver fabrication demand up in 2000

Demand for products made with silver grew by more than 5% in 2000, according to a survey compiled by London-based Gold Fields Mineral Services and published by the Silver Institute in Washington, D.C.

World Silver Survey 2001 cites optimistic consumer spending and business investment as reasons for the rise in demand for products containing silver.

In 2000, the deficit between fabrication demand and conventional supply, consisting of mined silver and recycled scrap, grew to 151.2 million oz., further reducing stockpiled material. The reduction is part of a decade-long trend that has seen private bullion stocks fall by 1 billion oz.

Silver mine production and scrap supply edged up slightly in 2000. The sale of bullion stocks by private- and official-sector holders was a major component of total supply last year, with the Chinese being the biggest liquidators.

The growth in fabrication demand for silver accelerated in 2000, up to 5.3% from 4.9% in 1999. Regionally, fabrication growth was strongest in East Asia.

Worldwide fabrication demand has grown by 32% over the past decade. Overall, industrial applications remained the prime driver of the rise in total demand for silver, accounting for 41% of fabrication demand. This rise was spearheaded by the electrical and electronics sector, which increased 12.2% to 166.6 million oz. in 2000. Much of this growth is attributable to silver’s use in products such as compact discs, semiconductors and cellular phones.

Jewelry and silverware fabrication rose a solid 3% in 2000 to 281.7 million oz. Again, the increase was strongest in East Asia, where demand rose nearly 13% to 43.9 million oz. Europe saw a fifth year of growth, up 3% to 87.5 million oz.

Silver’s use in photography, the third major component of demand, dipped slightly in 2000 by 1.2% to 230.6 million oz., posting its second-best performance of the past decade. Japanese photographic demand was up 7% to 64.1 million oz. in 2000, while the U.S. experienced a 1% growth in silver demand for photographic uses.

World silver mine production rose almost 7% in 2000, with global output reaching 589.4 million oz., largely as a result of a recovery in Mexico and another surge in Australia. North American output increased by 8% last year to 189.3 million oz.

Central and South American production was down 1%, to 135.5 million oz., which represents nearly 23% of global production. Peru, the world’s second-largest silver producer, produced 78.4 million oz. in 2000, up from 71.7 million oz. in 1999.

Copies of the survey sell for US$95. For more information, visit www.silverinstitute.org