Silver demand rises in 1996 — Mexico and India chief consumers

For the eighth consecutive year, silver demand has exceeded supply from mine production and scrap, according to a survey released by the Washington, D.C.-based Silver Institute.

The increased demand in 1996 is attributable to higher fabrication requirements, chiefly for jewelry and silverware in India and Mexico. Last year’s deficit required the liquidation of 172 million oz. of above-ground stocks. World fabrication demand rose to 803.3 million oz. in 1996 from 768.8 million oz. in the previous year.

Rising demand in India and Mexico is attributable to increased prosperity in those countries. India’s fabrication demand for the white metal last year increased by 47% to 93.9 million oz. over figures recorded in 1995. Demand in Mexico rose to 14.2 million oz. in 1996, compared with 11 million oz. in 1995 — an increase of 29%. According to the survey, a weakened peso discouraged consumers from buying gold but increased interest in products made from silver.

The world’s silver supply rose to 814.9 million oz. last year from 768.8 million oz. the year before — an increase of 6%.

Mine production increased to 492.6 million oz. in 1996, up from 478.9 million oz. in the previous year. Primary silver mines generated almost 17% of that production. Mexico led the world in silver production last year, cranking out 81.3 million oz. — an increase of 9% over figures recorded in 1995.