Silver prices have soared to more than $30 an ounce from $18 a troy ounce in the last year. Though the world has roughly a 5,000-ton surplus of silver, prices for the metal closed last year at their highest level in three decades, says Suki Cooper, a precious-metals analyst with Barclays Capital.
That is pinching the film industry. For every dollar increase in silver's price per ounce, Eastman Kodak /quotes/comstock/13*!ek/quotes/nls/ek (EK 3.72, +0.06, +1.64%) Co.'s earnings are hurt between $10 million and $15 million, says Brad Kruchten, president of the Rochester, N.Y., company's film group.
Kodak this year started indexing the price of its film to silver prices. "Customers in general don't like that," Chief Executive Antonio Perez told investors earlier this month. But he said customers understand the rationale.
Kodak also continues to enter hedging contracts on silver—essentially, insuring against sharp price increases—and is working to shift toward digital services. The company expects that will reduce the impact to between $5 million and $10 million for every dollar-an-ounce increase in silver's price.
Fujifilm Holdings /quotes/comstock/64e!4901 (JP:4901 2,979, -36.00, -1.19%) Corp. raised prices 10% on its silver-halide photographic paper and print materials in the U.S. The company also increased prices between 5% and 20% world-wide on photographic paper. The Tokyo-based company said surging raw-material prices on items like silver reduced operating income by 9.4 billion yen ($112.8 million) in the latest quarter.
