China's Silver demand to rise significantly over the rest of this decade: Silver Institute
Gold | 2012-05-15 13:12:44
Many knowledgeable observers of the Chinese market believe that silver demand will continue to grow significantly over the rest of this decade, therefore increasing China’s importance to the global market.
By Paul Ploumis
WASHINGTON (Scrap Monster): The Silver Institute has commissioned a new report on the Chinese silver market. The report will focus on China’s growing importance in the global silver industry and on identifying emerging trends that may impact the broader market over the next several years.
Twenty years ago China accounted for some 3 percent and 5 percent of global silver demand and supply, respectively. In 2011, according to “World Silver Survey 2012″, those figures climbed to 16 percent and 14 percent, making China the world’s second largest consumer and third biggest producer of the white metal.
Many knowledgeable observers of the Chinese market believe that silver demand will continue to grow significantly over the rest of this decade, therefore increasing China’s importance to the global market. For instance, it is noteworthy that the country switched in 2007 from being a net exporter to a growing net importer of silver bullion.
“This report will describe the dramatic rise of China as a source of both supply and demand, and analyze what the trend in these variables is likely to be over the next few years,” stated Michael DiRienzo, Executive Director of the Silver Institute.
The report will be produced for the Silver Institute by Thomson Reuters GFMS and released in October.
Emergence of Chinese Silver Futures
Chinese investors now have an opportunity to trade silver from home, which will spur rising prices. On April 26, the Shanghai Futures Exchange received approval to begin trading silver futures. The contract launched on May 10.
Investors have shown great interest since trading began. Trading silver futures was previously less convenient for investors in China. Their only options were using international markets or trading indirectly via local Chinese markets.
There has been an absence of a means of trading in silver in China. The market will be bigger and more liquid with the advent of these futures contracts.
Look for US exchanges to stop dominating silver futures trading, and the wave of new market entrants will impact silver's price point.
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