5 October 2009

"In 2010, price will benefit from the huge export decrease of Chinese primary silver.'

NEW YORK--(Business Wire)--
Reportlinker.com announces that a new market research report is available in its

Research Report on Chinese Silver Industry, 2009-2010


In 2008, output of Chinese silver ranked the first all over the world with 9,587
tons, increasing by 5.45% YOY. The growth rate decreased compared with over 20%
in previous five years. Meanwhile, there is no change in distribution of
domestic silver. Most are spin-offs from copper, lead or zinc. Others are from
regeneration or independent silver ores.

In 2008, main provinces for silver production were Hunan, Henan, Yunnan and
Jiangxi. Enterprises ranking top four in output were Yuguang Gold and Lead
Group, Yunnan Copper, Xinda Silver Industry, Chenzhou City Jingui Silver

In 2008, export quota of silver was 4,800 tons. On August 1st, 2008, the 5%
export rebate was eliminated. Affected by rebate elimination and price decrease,
export volume was 4,043 tons, 441 tons less than in 2007.

Silver powder import increased to 1,511 tons in 2008, rising by 54.34% YOY.
Import of silver concentrate reached 70,100 tons, declining by 62.84% YOY.

In 2008, there was no great change in Chinese sliver consumption structure
compared with 2007. The consumption reached 4,500 tons. The growth rate of
consumption exceeded 10% for years.

Silver price trend depends on two factors: investment/speculation demand of
silver as a product and demand & supply of silver. Investment demand is closely
related to global financial liquidity (inflation level) and USD trend. It is
predicted that the global investment demand is low in 2009. As to demand &
supply of silver, it is estimated that supply exceeds demand in 2009; in 2010,
price will benefit from the huge export decrease of Chinese primary silver.

In 2007, 51% of silver demand was from industrial fields, including electricity,
electronics, silver based solder, etc. Benefitted from global economy booming,
silver demand from industrial fields was in stable increase in the past six
years. Compound annual growth rate (CAGR) was 5.2%. It is estimated that demand
from industrial fields will decline by 3%-5% affected by global financial crisis
in 2009. In 2007, consumption demand (photography, jewelry, silverwares, silver
coins and medals) took up 43% of the aggregate demand. Due to the decreasing
demand from photography, declining tendency of total silver consumption demand
could not be got rid off in a short period.

70% of silver is the spin-off of copper, lead, zinc and gold. From 2005 to 2007,
substantial price increase of these metals resulted in the release of huge mine
productivity in 2009-2010. It is believed that as long as prices of these metals
are higher than production costs, silver supply will be in stable increase with
the increasing outputs of copper, lead and zinc( though prices of these metals
have declined since 2008).

It is predicted that global industrial demand for silver will rise in the second
half of 2009 though demand of the whole year may be lower than in 2008. Output
of associated minerals of silver is reduced while new applications of silver are
emerging. In the long run, the prospect of silver is optimistic. Rapid
development of Chinese economy pushes silver consumption. Chinese silver
manufacture will enter increasing period. Silver output is estimated a stable
increase in 2009 but growth rate will decline. Chinese silver industry is
heading to large scale, brand and internationalization. International
cooperation opportunities are increased. There is great potential in Chinese
silver consumption market. Consumption growth rate will be higher than output
growth rate in the future.

Investment in further processing of silver will be hot in China. Major
investment objects are E-silver paste, nanometer silver powder, nanometer silver
antimicrobial material, high-performance silver based alloy and electric shock,

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