Silver looks "unlikely to break out ofgold and platinum's shadow" in the near future, although this
year is likely to see demand increasing at a faster rate than
supply, a study by Credit Suisse said.
    The study predicted demand rising by 300 tonnes to 13,200
tonnes this year, against a 50 tonne increase in supply to
14,050 tonnes. This should cut the global oversupply to 850
tonnes from last year's provisional 1,100 tonnes.
    The study noted that the effects of last year's lower
prices were having a dampening effect on total supply, which
was now back down to around levels of a decade ago.
    However, the study said that primary production, likely to
reach 10,000 tonnes this year against a provisional 9,950 in
1986, is relatively insensitive to price falls.
    Around a third of silver production comes from heavily
indebted Mexico and Peru.
    Price-sensitivity is also reduced by the fact that the
majority of silver is a by-product of other mining activity.
 Reuter
