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Sunday, May 26, 2002

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Silver market outlook bright

Our Bureau

MUMBAI, May 25

THE silver market outlook for the current year looks brighter. The upbeat mood comes after global economic downturn in 2001 affected the market in a variety of ways, according to the World Silver Survey 2002 released by the Silver Institute in Washington.

Silver fabrication demand is expected to recover fairly strongly in 2002 as the world's economies pick up steam. The current rebound in global GDP growth is already starting to lead to higher demand for a wide range of silver-containing products. Over the rest of the year, the health of the electronics industry, in particular, will be an important factor, the report pointed out.

Citing reasons for a 4.9 per cent dip in silver fabrication demand in 2001, the survey said, it was principally due to a downturn in global GDP, the anaemic performance of the electronics industry and the bursting of the "tech bubble''.

The electronics sector was the key factor behind the decline in overall silver fabrication last year. "This is not surprising given that world economic growth slumped to its lowest level since the early 1990s,'' the institute said. Industrial use of silver is the largest component of silver fabrication demand, with silver being used in a wide range of products.

Electrical and electronics applications account for the largest area of industrial silver offtake, consuming nearly 133 million troy ounces (Moz) last year. Brazing alloys and solders are other important industrial uses of silver, taking up 36 Moz in 2001. Jewellery and silverware fabrication demand escalated a solid 2.2 per cent in 2001.

Asia accounted for most of the global gains, with Indian offtake growing particularly strongly - up nearly 22 per cent. Thailand reported an 8 per cent growth in offtake.

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