Silver News

Silver Institute Releases Ground-Breaking Report on the Chinese Silver Market

(September 27, 2005 – Washington, D.C.) The Silver Institute today released a report on the Chinese silver market entitled, A Review of the Chinese Silver Market. The report was prepared for the Institute by GFMS Ltd., the precious metals research consultancy. The report is available online at no cost on the Institute's home page at www.silverinstitute.org.

GFMS has been conducting research in China for over 20 years, and during this time they have compiled a comprehensive database of Chinese silver supply and demand. There are, however, aspects of this complex and diverse market that remain opaque, and with this in mind, the Silver Institute commissioned GFMS to produce a stand-alone report on the Chinese silver market. This report examines all components of Chinese supply and demand for silver, and provides a comprehensive overview of this important market

For many years, China has been the fastest growing of the major economies in the world. It should be no surprise therefore that the Chinese economy bears great potential for silver demand, primarily through industrial uses of the metal – although the country is also growing as a significant photographic market. Looking at the country’s share of global silver fabrication, this has grown from around 3 percent a decade ago, to well above 6 percent in 2004.

According to the report, China is the most important emerging market for silver, with the potential to rival the United States and Japan in industrial demand for the metal, and a major silver jewelry market, both from a fabrication and consumption perspective. China is currently the world’s fourth largest silver miner.

Another important source of supply in China originates from recycled silver scrap, which comes primarily from industrial and photographic uses, and GFMS estimates that recovery from these sources has risen sharply over the past 10 years. However, as has been the case in mine production, the tight control of the market by the People’s Bank of China and the state authorities in the past have complicated estimates of supply from such sources. The report gives GFMS’ latest estimates of the size of the Chinese scrap market.

One of the biggest changes on the supply side in recent years has been the major increase in the amount of silver recovered from imported base metals concentrates. During the early- to mid-1990s, silver supply from such sources was insignificant but, by 2004, the volumes recovered were equivalent to half the country’s domestic mine production.

Finally, the report looks at the issue of stocks of silver in China. GFMS years ago identified China’s contribution to global silver supply from the run down of domestic bullion stocks, mainly from official and quasi-official inventories. The report points out that although GFMS believes that such stocks still exist, they are confident that they stand at significantly lower levels than in the mid-1990s and that Chinese stocks are unlikely to exert much of an influence on the market going forward.

The Silver Institute is a nonprofit international industry association headquartered in Washington, D.C. Established in 1971, the Institute serves as the industry's voice in increasing public understanding of the value and many uses of silver.

For more information, please contact Mike DiRienzo at the Silver Institute (202) 835-0185, or PaulWalker at GFMS +44-7803-232-529.

For Further Information Contact:

Mike DiRienzo
The Silver Institute
1200 G Street, N.W., Suite 800
Washington, D.C. 20005
Tel: (202) 835-0185
Fax: (202) 835-0155