Silver 30


Commodity Name Silver
Symbol SILVER30
Basis for price quote Ex-Ahmedabad – Inclusive of all taxes and levies relating to import duty but excluding sales tax/VAT and any other additional tax or surcharge on sales tax, local taxes and octroi.
Trading unit  30 KG
Delivery unit 30 KG
Quotation / Base value  Rs per KG of Silver with 999 fineness purity.
Tick size (minimum price movement) Rs1 per KG
Delivery Logic Compulsory
Delivery Center Ahmedabad, accredited Vaults of the Exchange as notified by the exchange from time to time. (within a radius of 100 kms from the corporation/municipal limits)



Contract Specification January 2014 onwards



Contract Specification January 2014 onwards

Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. Silver is the whitest color of any metal. Silver is harder than gold, but softer than copper and Silver is more malleable than any element except gold. Silver is the best conductor of electricity and of all the elements. Silver has the highest degree of reflectivity and reflect up to 95%. It is a coincidence that in two rapidly rising economies (China and India), the population has a centuries old attraction to precious metals.
History:
Often considered as the "poor man's gold", silver was used in ancient Italy and Greece for personal ornaments, arrow, weapons and coinage. Ancient civilizations found silver deposits plentiful on or near the earth's surface. Relics of these civilizations includejewellery, religious artifacts, and food vessels formed from the durable, malleable metal. This metal took on near mystical qualities in marking important historical milestones throughout the ages, and served as a medium of exchange. During World War II, the short supply of copper led to the substitution of silver in many industrial applications. The United States government loaned out silver from its massive reserve located in the West Point vaults to a wide range of industrial users. During the war many electrical connectors and switches were silver plated. Another use was aircraft master rod bearings and other types of bearings. Since silver can replace tin in solder at a lower volume, a large amount of tin was freed up for other uses by substituti g silver. Silver coins, those minted by an authority either public or private came on the scene in the eastern Mediterranean during 550 BC. By 269 BC, the Roman Empire adopted silver as part of its standard coinage and it was used throughout the trading world. Until the late 19th century, most nations were on a silver standard with silver coins forming the main circulating currency. Today, Mexico is the only country currently using silver, albeit in small amounts, in its circulating coins. Other metals such as copper and nickel are more commonly used.

In today's world not a missile goes aloft from Cape Canaveral, not a jet plane from idlewild that does not contain some silver. Remarkable 25,000,000 or more ounces of silver are used each year in the U.S. in the form of solders and brazing alloys in refrigerators and air conditioners, electric appliances, aircraft and rockets. About 19,000,000 ounces are estimated to go into electric contacts in appliances and electronic equipment. More than 1,000,000 ounces are consumed in ceramic colors and pigments. About 1,500,000 ounces are used in making silver-zinc batteries for jet aircraft, missiles and portable TVs and silver-cadmium batteries for portable equipment.

Nelson Bunker Hunt and William Herbert Hunt, the sons of Texas oil billionaire Haroldson Lafayette Hunt, Jr., had for some time been attempting to corner the market in silver. In 1979, the price for silver jumped from $6/oz to a record high of $48.70/oz. The brothers were estimated to hold one third of the entire world supply of silver (other than that held by governments). The situation for other prospective purchasers of silver was so dire that the jeweller Tiffany's took out a full page ad in the New York Times, condemning the Hunt Brothers and stating "We think it is unconscionable for anyone to hoard several billion, yes billion, dollars worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver. But on January 7, 1980, in response to the Hunt's accumulation, the exchange rules regarding leverage were changed, when COMEX adopted "Silver Rule 7" placing heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days.

Production:
Silver is extracted from mines. Silver has been mined for over 25,000 years. Widespread soon after the Roman conquest of the first century AD, mining of silver was a driving force in the settlement of western North America. The first major silver ore deposits in the United States were discovered at the Comstock Lode in Virginia City, Nevada, in 1859.The production of silver mines in the world is complex to study because there are variety and the number of countries where the silver mines (on 5 continents, more than 30 countries) exists. The pure silver producers are few, in fact there are a variety of metallogeny deposits, 75% in mine production of silver is under product of zinc, lead, copper, or gold. Silver production increases by 2.5 percent to 735.9 Moz in 2010.

Mexico eclipsed Peru and after Peru, China is the world's largest silver producing country in 2010, followed by Australia and Chile. Global primary silver supply recorded a 5 percent increase to account for 30 % of total mine production in 2010

Silver Output by Source Metal
Silver
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Top five silver producing Co.'s
  • BHP Billiton from Australia producing 46.6 Moz
  • Fresnillo plc from Mexico producing 38.6 Moz
  • KGHM Polska Miedz from Poland producing 37.3 Moz
  • Pan American Silver Corp. from Canada producing 24.3 Moz
  • Goldcorp Inc. from Canada producing 23.0 Moz

Demand:
Total fabrication demand grew by 12.8 percent to a 10-year high of 878.8 Moz in 2010; this surge was led by the industrial demand category. About 2/3 of silver demand is from industry and the rest of demand comes from jewellery and recycling. The largest silver used in United States is roughly around 25% share of the global level in 2010. This was followed by China, Japan, India and EU was around 15%. These fig. changed greatly for instance the EU's standing at 21% and china at 11% a decade ago.

Industrial Use:

Silver's industrial demand rose from 273 Moz in 1990 to approx. 465Moz in 2007. As there was economy slow down in 2008, silver's industrial demand reduced by 50% and again in 2010 as economic improvises, silver demand rose  again. The use of electrical contacts in cars has rincreased rapidly controlling windshield wipers, seat adjustment to managing navigation system. In PV industry silver off take soared from around 3Moz in 2004 to 50 Moz in 2010.

United States has the largest silver industrial fabricator since last 20 years. United States remained the single largest supplier to the industry, both at domestic level as well as for export markets. As comparison the DM's with EM's market, EM's used silver at just 14% or 37Moz in 1990 worldwide and it reached 40% in 2008.

As silver is the best electrical and thermal conductor, silver has enjoyed the robust growth in the field of technological, electrical and electronics from last 20 years. Silver enjoyed an impressive increase of 242Moz last year from a low base of 91Moz in 1990

Silver
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Silver
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Other Silver industrial uses are:
  • Food Packaging
  • Wood preservatives
  • Hygiene
  • Batteries
  • Auto catalyst
  • Super conductors

Silver jewellery, ETF and Coins:
Silver demand is increasing day by day as India and china are the main consumers of silver in form of bullion bars and coins. Demand for Silver ETF is also increasing as many people are pushing towards gold and silver society because of the weakening of the Dollar. Silver jewellery is highly prized for its brilliant luster and its ease of fabrication. Pure silver is of 999 fineness, which is quite tarnish resistant, but it is too soft for use in jewellery. Silver has benefited from demand for its 'white' look in jewellery which mirrors fashionable designs of white gold - an alloy of gold and platinum and palladium – but at a lower price point.

Silver
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Silver is also used as a coating material for optical data for storage media, including DVD's. In India silver fabrication areas are the electrical and electronic sector, brazing alloys and solders, other uses of silver are plating, pharmaceutical and associated chemicals foils and jari (traditional clothes).

Indian Scenario:
India is primarily a silver importing country. The production of silver in India does not meet or satisfy the growing demand as it produces 2.1 Moz placing it at the 20th position. The import of silver in India hovers over 110 million ounces that shows the huge size of Indian domestic demand.  In India silver demand mostly comes from rural areas as investments that account 70% of the country's usage as compared with china where 70% demand comes from industrial sectors. India is 3rd largest consumer in the world. The major importing center of silver in India was Mumbai but now it has been shifted to Ahmedabad and Jaipur due to high sales tax and octroi charges. The Countries from which India imports silver are:

  • China
  • United Kingdom 
  • European Union 
  • Australia 
  • Dubai

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Major Exchanges in world
London Metal Exchange
CME Group

Major Websites
www.lme.com
www.cmegroup.com
www.thebulliondesk.com
www.lbma.org
www.kitco.com
www.gold.org
www.goldlinkschart.com
www.indexmundi.com
www.futuresource.com
www.gfms.com