Metals News (June 01, 2003)

New silver report

The silver price demonstrated resilience in 2002, in spite of an enduring global economic slowdown. This is the conclusion of the World Silver Survey 2003, released in early May by the Washington, D.C.-based Silver Institute. With an average price of US$4.60/oz in 2002, silver recorded a 5% year-on-year increase. Compared with copper, lead and zinc prices, which fell by 1%, 5% and 12%, respectively, silver retained its characteristics as a precious metal, rising in value during periods of crisis last year. The silver price is trending even higher in 2003, posting a cumulative average of US$4.66/oz in the first quarter.

Global silver mine output declined to 585.9 million ounces in 2002, it largest annual drop since 1994. There could be a further decline in mine production in 2003, according to the report, as base metal producers are forecast to scale back output and no significant new capacity is expected to come online.

Mexico again mined the most silver last year, followed by Peru, Australia, the United States and China. Silver from primary mines generated 27% of total mined silver last year. Average cash costs declined 23% from 2001, to reach US$2.31/oz.

The annual summary has been published since 1990, and contains information about demand, industrial uses, coinage, new uses and stockpiles. This edition of the World Silver Survey was independently researched and compiled by London-based Gold Fields Mineral Services Ltd., the precious metals research company. The report was sponsored by 17 companies and organizations from the Americas, Europe and Asia.

Copies are available for US$175 and can be ordered from www.silverinstitute.org, www.gfms.co.uk or by phoning (202) 835-0185.