<<Silver proves it's still firmly in the picture
By Kevin Morrison
Financial Times; Mar 06, 2004
The 17 per cent rise in silver prices so far this year provides a contrast to the weaker gold price.
The two metals often move in tandem. However, silver's price rise is even more surprising given Kodak's recent decision to embrace the digital photography revolution at the expense of its traditional photographic film business.
Photography accounted for about a quarter of silver usage last year, just behind jewellery and other industrial uses. However, its share has slid from 27 per cent of total silver consumption in 1998.
"There are a number of investors who think that the death of the photo film business story has been overdone," said Kamal Naqvi, precious metals analyst at Barclays Capital.
That has been backed by speculative investor interest in US silver futures, which is at near-record levels. Silver prices reached an intraday peak of $6.93 a troy ounce yesterday before settling at $6.86/$6.88 a troy ounce, up 12 cents on the day. Physical silver prices moved close to breaking a six-year high of $7 on Monday, falling just one cent short. But the latest ascent puts the metal within striking distance of $7, a point it has struggled to remain above for the past decade.
Silver has still managed to rise on the week despite a bounce in the dollar. The slide in the greenback has helped underpin a rise in commodity prices this year.
Mr Naqvi said while film sales in the US, Japan and western Europe were falling, they were increasing in China and India.
He said there were also signs that high street photo processing shops were developing more photos from digital discs - although customers are developing fewer pictures they are developing more copies of the ones they like, and in bigger sizes, which in turn uses nearly as much silver as developing a roll of 24 standard photos.
The Silver Institute, the industry body that promotes the metal, unsurprisingly put a positive slant on the photo film-silver debate when it said in its recent quarterly report that consumers are also using high street photo developers because they are cheaper than printing from the home inkjet printer.
The institute forecasts the total number of prints from films to drop from 135bn in 2000 to 101bn in 2008, while prints from digital still cameras to rise from 3bn in 2000 to 67bn in 2008.
However, precious metals analysts said the widespread growth of photo mobile phones also poses a threat to silver usage in traditional film processing.>>
EP, here in Asia, many people who can afford digital cameras, don't have the right printer nor even have a PC. They take pictures select the best ones and go to a shop and get them printed. |
