Page 15 - Bullion World Volume 03 Issue 6 June 2023

Bullion World | Volume 3 | Issue 6 | June 2023

Moderator: We have seen that the government of Bullion index; how does this help the mid/small size
India has focused on Silver manufacturing for the players in the Indian market?
past couple of years. Many semiconductor and Mr Shivanshu Mehta: As a leading market
mobile manufacturing factories are being set up. infrastructure institution, MCX must support the
How does it affect Hindustan Platinum and Choksi physical players. For silver which is both a precious
Heraeus, as they are prominent players in the Silver and an industrial metal, the exchange has launched
industry? In addition, does the increase in silver various contracts traded on the exchange. To mention
prices hurt its usage in industrial applications? futures, options, and indices. These contracts can
Mr Gautam Choksi: Industrial demand for silver is cater to all the uncertainties, like the disparity of
rising, whether for photovoltaic applications or in using discount and volatility. Over the past year, records
EVs, making it better for manufacturing units in India. have shown that silver futures are one of the most
The main effect depends on how much of this demand traded contracts in the world. These contracts must
is catered by the Indian manufacturers. There is an only be used for hedging and not for speculating.
inverted duty structure in India for silver, making it a lot Hedging instruments help keep the asset safe from any
more difficult as the price of bullion import would be imbalances caused by volatility.
much higher than the import of silver salts and silver
paste. Questions from the audience.
Question- Where do you see the bullion tech
Mr Kishore Choksi: The inverted duty structure market, especially digital gold and silver, in the
that exists should be rectified. The duty structure on near future?
electrical contacts is significantly lower than that on As the demand and popularity for digital silver and
metal. This anomaly does not create a level playing gold markets grow, it becomes a more viable option for
field between domestic manufacturing and imports. bankers. There is a growing trust amongst retailers in
The contact import duty structure should be on par India, making it a good investment and hedging option
with the silvers to rectify this. for all the value chain participants.

The rise in silver prices can hurt the industrial Question to Mr Kishore Choksi: Since Choksi
application industry, making it costlier for the Heraeus is an industrial manufacturer, what
manufacturer. Some innovations to reduce the silver strategy would you advise a price-sensitive
content in industrial applications are in process, which consumer given the price fluctuations that happen
will help to minimize the silver usage intraday?
Primarily Choksi Heraeus deals with customers who
Moderator: Hindustan Zinc Limited is the 5th are mainly focused on product quality. We offer various
largest producer of silver in the world. The price options, like the average of the month or the
company has a target of 1,000 tonnes of silver opening and closing on a particular day, based on the
production. What are the measures taken to consumer. Fixing the price of silver with the buyer is a
achieve this self-set target? must to eliminate price fluctuations.
Mr Vijay Murthy: Hindustan Zinc is on course to
achieve the target of 1000 tons of silver in the next few Question to Mr Shivanshu Mehta- Can you briefly
years. For 2022, Hindustan Zinc managed to produce explain how the two exchanges, MCX and IIBX, will
714 tonnes of silver, and the projection for 2023 is 750 work together in the coming times?
tonnes. Coming to the target of 1000 tonnes per year, IIBX is a national project and is a vision of the Indian
one of the top mines in Rajasthan is being explored to government. It is under the regulation of IFSCA. IIBX is
find rich silver content, which will help the company considered a gateway for gold imports into the country.
realize this goal. At the same time, there are varieties of MCX, on the other hand, is a domestic platform mainly
obstacles that must be overcome to achieve this goal. used for hedging purposes. MCX caters to three types
of risks – Commodity price risks, currency risks and
Moderator: MCX is considered one of the top global risks arising from the change of customs duty. There
exchanges in the market. In the past year, MCX has will be integration in future between these exchanges,
introduced new products like the right options and which will benefit the whole bullion industry.

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