Survey shows higher silver demand

For the fifth consecutive year, fabrication demand in the silver mining sector has exceeded supply.

In the sixth annual World Silver Survey of the Silver Institute, President Jaime Lomelin says demand exceeded supply by 150.2 million oz., forcing the reduction of silver stocks around the world.

He adds that silver has three major use categories — industrial-decorative, jewelry/silverware and photography, all of which “provide the metal with a strong demand base for the future”.

This year’s report was compiled for the first time by London-based Gold Fields Mineral Services and is based on data from 56 countries, including nearly 750 producers, fabricators, manufacturers, government officials, bankers and other participants in the world’s silver markets.

For the first time, fabrication demand in the Commonwealth of Independent States (CIS) and China is recorded and analyzed in the report. The contrasting demand in these important countries is a reflection of the fact that China is expanding its industrial base while the CIS struggles to prevail over the virtual collapse of its economy in many areas.

Worldwide silver demand for industrial and decorative users rose by almost 6% to 279.4 million oz. in 1994. This sector was the premier user of silver last year, ahead of photography and jewelry/silverware.

Silver demand by the world’s photographic industry totalled 219.3 million oz., with demand in the Western world (206.7 million oz.) up 3% over the previous year.

Worldwide fabrication of coins and medals rose 8.6% to 42.9 million oz., the highest level since the mid-1960s.

Despite strong increases in three of the four demand sectors, worldwide fabrication demand declined 1.5%, or about 12 million oz., during 1994. This decline was attributed primarily to lower jewelry and silverware use in Thailand and India.

Total supply of silver declined 3.9% in 1994. Mine production decreased 5%, from 468.8 million oz. in 1993 to 444.2 million oz. in 1994.

Primary silver mines accounted for only 14% of output in 1994; the rest was a byproduct of other metals.