Creamer Media Login

Silver loses shine in top buyer as prices rocket to record high

7th August 2020

Font size: - +

Silver consumption in India is set to halve in 2020 as buyers, mainly from rural areas, skip purchases amid surging prices and a weak economy.

Imports by the world’s biggest consumer may tumble by as much as 50% this year from about 6 000 t in 2019, according to Chirag Sheth, a consultant at London-based Metals Focus. Imports were down by nearly half in the first six months of the year to 1 735 t, he said.

Silver prices in India have rallied more than 60% this year to record highs as bullion gets a lift from declining real bond yields, a weakening dollar and chronic uncertainty over the global economy. That, combined with the hit to the economy from coronavirus-related lockdowns that shuttered businesses, resulting in millions losing their jobs, are curbing demand for the metal.

“Silver fundamentals remain weak due to low industrial offtake,” according to Harish Galipeli, head of commodity and currencies at Inditrade Derivatives & Commodities. “However, prices are up tracking higher gold prices and it’s purely investment demand driven at this moment.”

Silver jewellery demand, which comprises more than a third of total consumption, may drop by as much as 25% and silverware usage by 30% to 40%, Sheth said. Nearly two-thirds of India’s demand for precious metals comes from the rural parts of the country as they are considered as an insurance against bad times owing to a lack of good banking infrastructure.

“If you look at the market post 2011, for a few years the rural consumers just went away and they did not buy any silver because of higher prices,” Sheth said. “We have to see if the same trend plays out this time as well.”

The country imports most of its silver from places including the UK, mainland China and Hong Kong. Locally, Hindustan Zinc produces about 600 t annually.

Edited by Bloomberg

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

Click Here

MAGAZINE & ONLINE

➕

RESEARCH CHANNEL AFRICA

➕

CORPORATE PACKAGES

CLICK FOR A QUOTATION

➕