Silver Futures Dive as Film Sales Slow

Silver futures fell to an eight-year low Tuesday, as slowing economies reduce consumer demand for photographic film and paper containing the metal.

U.S. film sales probably will fall 2% this year, the first decline since 1992, said Caroline Sabbagha, an analyst at Lehman Bros. Lower sales of paper and film contributed to a 37% drop in second-quarter profit for Eastman Kodak Co., the biggest single user of silver.

Silver for September delivery fell 2 cents, or 0.5%, to $4.172 a troy ounce on the Commodity Exchange in New York. That was the lowest closing price for a most-active contract since October 1993.

Silver has slumped 10% year to date. Gold, by contrast, is down 2.3% this year.

“People are not traveling to exotic places where they take a lot of pictures,” Sabbagha said. “Instead of a safari, they’re going to the Jersey shore and taking fewer pictures.”

Also contributing to reduced sales of photographic film is the increased popularity of digital cameras, which don’t use film, she said.

U.S. silver demand from the photographic industry reached 2.5 million metric tons last year, up 1.1% from the year before and the eighth straight yearly increase, according to Gold Fields Mineral Services Ltd., a London-based precious metals research firm.

Photographic use accounts for 25% of gross silver demand, the firm said.