Silver

Silver

Recently, in an article published by Bloomberg on October 19, silver exports from China can be reduced by 40% this year as domestic demand from industry and investors are climbing, according to Beijing Antaike Information Development Co. China world's third largest producer Mon Peru and Mexico. Shipments can be reduced by about 3,500 metric tons in 2009, says Feng Juncong, chief analyst at state-owned Antaike. Customs data showed exports fell almost 60 percent to 970 tonnes in the first eight months. This means that the amount of silver coming in the global market this year will be reduced by more than 70 million ounces. This represents about 8% of the total annual global supply by 2009.

"There is great demand in China this year and that has affected exports, which had already been injured after the tax rebate was abolished," said Cheng Thye Ng, head of gold in the Standard Bank Asia. "The demand is coming from all areas, including jewelry, investment and production, and it resulted in a lack of physical market in the Far East." In August 2008 China revokes export rebates for silver, in order to prevent the use of natural resources. "China can sharply reduce its silver exports this year after the abolition of the discount as domestic demand rose on expectations of higher inflation," said Feng. 5,100-ton quota for this year is unlikely to be fully used, "she said. Feng also mentions that there is great demand for silver by Chinese investors. "There are Chinese investors are now hoarding silver, along with other assets, in terms of expectation of higher inflation," said Feng. "China is short of resources, so these investors believe the metals will be valuable in the future."