The International Silver Trade

200 Pages·1992·9.372 MB·English

by  Thomas Mohide (Auth.)

The international
silver trade
THOMAS PATRICK MOHIDE
WOODHEAD PUBLISHING LIMITED
Cambridge, England
Dedicated to Jean Dorothy Dudbridge Mohide, Deirdre Siobhan Mohide,
Patrick, Ann and Christie Mohide and to the memory of my great
grandfather Thomas Lloyd, silversmith, and his granddaughters,
Christina and Dorothy Lloyd and Patrick Joseph Mohide.
Published by Woodhead Publishing Ltd, Abington Hall, Abington, Cambridge,
CB1 6AH, England
First published 1992, Woodhead Publishing Ltd
© Woodhead Publishing Ltd
Conditions of sale
All rights reserved. No part of this publication may be reproduced or transmitted in
any form or by any means, electronic or mechanical, including photocopy, recording,
or any information storage and retrieval system, without permission in writing from the
publisher.
The factual information contained in this study has been carefully compiled from
sources the author believes to be reliable. However, the author does not wish it to be
construed as a representation for trading purposes, nor as a prospectus for orders for
metal or company stocks. Neither the author nor the publishers can be held responsible
for the consequences of any errors or omissions.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
ISBN 1 85573 067 7
Designed by Andrew Jones (text) and Chris Feely (jacket), typeset by BookEns Limited,
Baldock, Herts and printed by St Edmundsbury Press
Dedicated to Jean Dorothy Dudbridge Mohide, Deirdre Siobhan Mohide,
Patrick, Ann and Christie Mohide and to the memory of my great
grandfather Thomas Lloyd, silversmith, and his granddaughters,
Christina and Dorothy Lloyd and Patrick Joseph Mohide.
Published by Woodhead Publishing Ltd, Abington Hall, Abington, Cambridge,
CB1 6AH, England
First published 1992, Woodhead Publishing Ltd
© Woodhead Publishing Ltd
Conditions of sale
All rights reserved. No part of this publication may be reproduced or transmitted in
any form or by any means, electronic or mechanical, including photocopy, recording,
or any information storage and retrieval system, without permission in writing from the
publisher.
The factual information contained in this study has been carefully compiled from
sources the author believes to be reliable. However, the author does not wish it to be
construed as a representation for trading purposes, nor as a prospectus for orders for
metal or company stocks. Neither the author nor the publishers can be held responsible
for the consequences of any errors or omissions.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
ISBN 1 85573 067 7
Designed by Andrew Jones (text) and Chris Feely (jacket), typeset by BookEns Limited,
Baldock, Herts and printed by St Edmundsbury Press
Tables
3.1 Estimated silver reserves 20
32 Breakdown by country of estimated silver reserves not yet
mined 21
4.1 Estimation of US sources of silver 27
4.2 Estimated world mine output of silver, '000 tonnes 30
4.3 Whole world and US mine output of silver, tonnes 33
4 A US - major silver producers 34
4.5 Canada - major silver producers 37
4.6 Australia - major silver producers 39
4.7 Mexico - major silver producers 41
4.8 Peru - major silver producers 43
4.9 Chile - major silver producers 44
7.1 Silver consumption in photographic materials, tonnes 69
7.2 Forecast of photographic uses in the world, 1992 and 1995 71
7.3 US silver consumption in electrical and electronic uses 73
7.4 Use of silver in commemorative coins 88
THE INTERNATIONAL SILVER TRADE
8.1 Western world consumption of silver, '000 tonnes 97
8.2 US silver fabrication demand in 1990 98
8.3 Japanese consumption of silver, tonnes 99
8.4 Consumption of silver in its three main uses, by country 103
9.1 Inflation and silver prices 124
92 Summary of leading gold forecasts 131
Figures
5.1 Total secondary silver output between 1980-91. 53
6.1 Stocks of silver in the market. 59
6.2 The supply of silver to and from India (estimated). 60
6.3 The steep drop in silver stocks. 63
8.1 Western world consumption of silver, Ό00 tonnes. 95
9.1 Current and constant ( 1967) US silver prices 1840-1990. 111
9.2 Silver supply and demand, non-communist world. 113
93 Long term silver supply/fabrication demand balance. 114
9.4 Silver to gold price ratio over 5000 years. 117
9.5 Silver to gold production ratio. 119
9.6 The value of the dollar over 43 years. 123
XI
Preface
T his desktop reference is designed to fill a gap, providing a compre-
hensive work on silver. It aims at providing an easy to read inclusive
picture for those who want to know more about this very important
and glamorous metal in a handy form to use in their jobs or in their private
lives, and occasionally to make some extra money.
Silver fascinates a large number of people as a valuable and beautiful
metal that is part of mankind's entire known history and early archaeology,
first as ornaments and money and now as a vital constituent in so many
products in our modern convenience society: in its dishwashers, cameras,
automobiles and X-rays to name but a few.
Silver is a lustrous white-moonbeam colour, soft (although harder
than gold) precious metal. In fact, the Peruvian Inca word for silver is 'the
tears of the moon', a brilliant and poetic name. Silver, less often found in
metallic form than gold and platinum, was used by man much later than
gold and copper. The allure of silver is undeniable. It has been known
and valued for its brilliance and portability since very ancient times and
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THE INTERNATIONAL SILVER TRADE
was used for jewellery and general ornament 6000 years ago and became
a standard of value, widely used for trade by 3500 BC and in the form of
coinage from 450 BC.
My purpose is to describe as interestingly as possible the things that
make silver desirable and indispensable and the way that money is made
from silver by many people and how the ordinary person of modest
means can do something similar without it being onerous.
The book's scope is panoramic. It tends to be encyclopaedic in
nature - everything you want to know, ranging from silver's unique
qualities as a metal and as a chemical when combined with certain elements,
to a variety of uses which are an inescapable part of our modern standard
of living: photography, X-rays, jewellery, sterling silver tableware, collector
coins, electronic equipment, medicine and so on. Further, it covers the
countries it comes from and those nations that consume it, how it is
hoarded and traded and how banks, insurance companies and others
help to make all this possible.
The method of treatment is to look at each of the various facets of silver
as one does a cut diamond, e.g. the close relationship that its usage has to
the surging increase in the world's population, its truly unique value in
safeguarding the eyesight of each baby born in advanced countries, its
unique value in money terms, its use in medicine generally, from radi-
ography to ointments and in preventive medicine, in our environmental
protection and safety, in family photographs, in telephone systems and in
the direct generation of electricity from the sun in large amounts.
With regard to the figures used in this book, I have declined to take
the view that only one view is valid and correct. This panoramic book
describes the world overall silver situation for the intelligent reader.
Some figures are given as 'flavour' but they are not articles of faith. As a
result, I have used various sources which may or may not be in agreement
with each other. This is an integral part of the silver trade which is an ani-
mate, changing entity and not one which can or should be forced to
gather dust on the antiquated bookshelf.
I have studied all aspects of silver for more than four decades and
have bought and sold large quantities of physical silver bullion to an
extent that few individuals now alive have done. It has never been a
'paper' subject to me. I have worked in companies mining, refining and
trading silver in several countries. I have been down a number of mines
XIV
PREFACE
and have had the privilege of serving in government, supervising the mining
and refining of silver. I have also been involved in the government super-
vision and reporting process of the public trading of metals and I have
also headed a commodities exchange, trading precious metals.
In writing this book, my special thanks go to a number of people
who provided me with invaluable information and I am indebted to them
for their assistance, particularly: Dr Gerry Anders, Bob Manning, John
Lutley, Samuel F Etris, Walter Frankland, Donald Corrigan and Patricia
Howe Gibson. I would also like to thank the Silver Institute for their kind-
ness, generosity and assistance in the preparation of the uses of silver in
Chapter 7.
Thomas Patrick Mohide
XV
Executive summary
1 Silver is a precious metal that has retained value over extraordinarily
long periods of time. Although the purchasing power of silver has been
subject to significant fluctuations, it has been a relatively stable store of
value and medium of exchange over the last 6000 years.
2 Silver, because of its lower price, has a more universal appeal than the
other much more expensive precious metals such as gold, platinum and
rhodium.
3 Silver is greatly desired for personal adornment in jewellery which is
silver's third largest use worldwide along with tableware. World silver
jewellery demand doubled between 1985 and 1990. Silver is also used for
the protection of personal savings in the form of bars and coins as an ulti-
mate and indestructible store of wealth that is unlikely to diminish as
most paper currencies do.
4 Silver, with its unique properties, has a very wide and growing range
of uses in industry: in medicine, dentistry, space vehicles, commemorative
coinage, mirrors, photography and X-ray films, tableware and electronics.
XVI