The credit for this should go to none other but Warren Buffett.He purchased 129 million ounce of the white metal which was close to 15 per cent world's annual supply.

Fundamentals favoured his investment strategy. According to the World Silver Survey 1998, for the ninth consecutive year, the conventional supply failed to keep pace with fabrication demand. Silver demand exceeded supply from mine production and the recycling of scrap by 198 million ounces in 1997.

Strong demand from India and surging industrial demand in the United States resulted in record silver offtakes last year, totalling 863.4 million ounces. Increase in the mine supply and scrap recycling were insufficient to meet the rise in fabrication demand last year. Between 1990 and 1997, cumulative silverfabrication demand far exceeded mine productions by 2,226 million ounces. The gap has been bridged by recycled silver scrap.

With an import of 112.4 million ounces in 1997, the Indian subcontinent remained a dominant player in the global market. During 1996, it has imported 113.5 million ounces.

A 6.1 per cent increase (or 49 million ounces) in fabrication demand last year raised the total silver offtake to 863.4 million ounce.

This increase was primarily due to developments in the industrialised world, with offtake up 4.5 per cent in Europe, 7.7 per cent in North America and 13.5 per cent in Japan.

North American demand was almost 194 million ounces, with United States consuming 167 million ounces of that total.

According to the survey, the largest world growth came from the Industrial sector, up 7.4 per cent for a total offtake of 323.4 million ounces. Electrical products and electronics, were up 12 per cent for the year and accounted for much of the increase.

This growth has mainly beendriven by development of new technologies and products that rely on silver's properties of superior electrical and thermal conductivity.

Over the past five years, silver demand for industrial uses in the US increased by more than 40 per cent to a record 70 million ounces in 1997.After a spectacular 15.6 per cent surge in 1996, jewellery and silverware grew another 5.3 per cent in 1997 to 280.2 million ounces. Nearly all of the growth was accounted for by Italy, where offtakes rose from 10.5 per cent to 44.8 million ounce, and India, where offtake grew by 3.2 per cent to 95.2 million ounce.

Two-third of India's silver demand is in jewellery, silverware, and gift items.

In the current year, the demand is expected to grow by 6 per cent. Demand from India, the largest consumer, is expected to remain firm. Overall, with fundamentals continue to point towards a positive outlook, the market will have no option but to give a higher prices to the white metal.