Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: IngotWeTrust who wrote (7304)	2/5/1998 3:21:00 PM
From: CuriousGeorge	Respond to of 116836

Silver supply stays steady But analysts say new supply could flood the market if prices climb February 4, 1998: 2:18 p.m. ET LONDON (Reuters) - New supplies of silver are unlikely to come onto the market at present prices even though they are at their highest in nearly a decade, analysts said on Wednesday. But if prices were to increase and the rise be sustained, metal - mostly from scrap recovery -- could come flooding in. With increasing tightness in the silver market, Tuesday's announcement by billionaire Warren Buffett that his company, Berkshire Hathaway Inc.[BRK.A], had bought up 20 percent of the world's estimated annual production of silver helped push the price to its highest levels since July 1988. Silver was fixed in London on Wednesday at $7.05 an ounce. T Hoare & Co. metals analyst Rhona O'Connell said if prices were to rise to $8 to $10 an ounce, some metal could find its way into the market. "Any further volatility, much up toward $8, $10 and $12, which I don't think would happen ... would see physical metal coming back into the market. You would see it flooding back," O'Connell said. Another London analyst, who asked not to be named, agreed: "These levels are pretty attractive. $7.50, $8.00 and even $10.00 those are logical levels to look for before you will see supply come into the market place," he said. O'Connell said 1997 figures showed that total silver supply from mines, scrap recovery and governments was around 570 million ounces while total demand was 740 million ounces. "So you have got the market in a shortfall automatically," she said. The shortfall equated to roughly 12 weeks' worth of physical demand. "The market went into a deficit as of 1991 and since then the drawback in inventories has been of the order of a billion ounces," O'Connell said. But the market could be back in equilibrium by the end of the decade because there are several new mines due to begin production in the next couple of years. "There is a tremendous amount coming in and it would be my guess that by the time we get up to the end of the decade, then the market will be back in balance between mine supply and physical demand," she said. Global miners would not immediately rush to increase production, because most silver is produced as a by-product of other metals such as copper, gold, lead and zinc. Stewart Murray, group executive in charge of commodities research at Gold Fields Minerals Services, said higher prices would have to be sustained for some time for mines to consider increasing output. "To get to higher production levels is usually very costly," Murray said. Silver is used mainly in photography, X-rays and electronics. It also has a large market in jewelry and eating utensils. Copyright 1998 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Copyright c 1998 Cable News Network, Inc. ALL RIGHTS RESERVED.