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Mix-Ansicht- Reuters(!): Reduced silver stockpiles could boost price...! - Tofir, 02.10.2001, 11:05
Reuters(!): Reduced silver stockpiles could boost price...!
danke an difri!
Monday October 1, 6:53 pm Eastern Time
Reduced silver stockpiles could boost price
By Jeanie Stokes
DENVER, Oct 1 (Reuters) - Silver, unlike gold, has yet to attract the attention of investors seeking a hedge against an unstable economy, but reduced stockpiles could change the environment, mining executives said on Monday.
Silver is used in electronics, photography, aerospace, pharmaceuticals and batteries, as well as for jewelry and silverware and demand is staying strong, executives said.
While gold prices surged about $20 an ounce following the Sept. 11 attacks in New York and Washington as investors sought a safe harbor for their money, silver prices have hardly budged. Spot silver prices fell slightly Monday to $4.62 an ounce.
Demand for silver has consistently outstripped production for more than a decade, but the metal price has changed little because end users have been able to take advantage of recycled metals and large stockpiles that were assembled back in the 1980s.
``Those stockpiles from the 1980s are being depleted pretty quickly,'' said Mark Lettes, chief financial officer at Apex Silver Mines Ltd. (AMEX:SIL - news), a Denver-based company that is developing a major silver/zinc mine in Bolivia. Lettes told Reuters that higher silver prices are"not a question of if, but when.''
Silver stockpiles fell to a historic low of less than than 500 million ounces last year, according to GPM Group.
The lack of available supply means it does not take much to move the price when investors are ready to act. Someone tried to buy 10 million ounces a couple of weeks ago, and it pushed the price up 25 cents an ounce, Lettes said. He also said that several years ago when billionaire Warren Buffett bought silver, it triggered a spike in the price. In the late 1970s, silver soared to $50 an ounce as the Hunt brothers tried to corner the market.
HARD MARKET TO FATHOM
Part of the reluctance on the part of investors may come from how hard it is to understand the vagaries of the silver market, said Arthur Brown, chairman and chief executive officer of Hecla Mining Co. (NYSE:HL - news), a 110-year old Idaho company. Hecla recently scaled back production at its Lucky Friday mine because the market conditions are just not there to mine silver profitably.
With other metals such as lead, zinc and even gold it is far easier to see why their prices rise or fall.
``On gold, you can see if the price goes up, the central banks start selling. The price comes down, the producers start hedging. All of those are easier to explain. Silver I cannot explain,'' Brown said during an interview at the Denver Gold Group's Mining Investment Forum. ''It's difficult, difficult for me, although for the long term I think the trend has to be sharply up."
Because of the long lead time needed to develop a mine, Brown said he believes companies, like Hecla, that are current producers or have mines that can be quickly put into production are most likely to benefit from any spike in metals prices.
Apex has the cash to wait for an improved pricing environment before it proceeds with construction of its San Cristobal mine, Apex President Keith Hulley said.
Analysts have said the company needs at least $300 million in financing to build the mine. Apex will need to hedge at least a portion of its future production in order to secure that funding, but the company"won't give its metal away,'' at low prices to meet that hedging requirement, Lettes said.
Mexico is the world's leading silver producer, followed by Peru, the United States, Australia and Chile, according to the Silver Institute, an industry trade group.
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Muss ja nicht Apex sein - Wo Soros die Finger im Spiel hat, ist Hedging wahrscheinlich nicht fern!
Gruss
tofir
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