Global consumption is expected to rise sharply by year’s end, resulting in the biggest demand-supply gap in decades
© Getty Images / 270770
The world is on the brink of a major silver supply shortage this year, the Silver Institute, a US-based agency monitoring the metal, said in its latest report.
Global demand for silver from industrial consumers, manufacturers of jewelry and housewares, and retail investors is expected to rise a record 16% against last year to a new all-time high of 1.21 billion ounces by the end of 2022, according to the report published on the agency’s official website.
As a result, the silver market is facing a multi-year deficit of 194 million ounces of the metal, four times the level seen in 2021 (48 million ounces). Silver inventories in storage in London and New York that are tracked by COMEX and the London Bullion Market Association (LBMA), were already down about 370 million ounces, or 25%, so far this year, the report stated.
The agency notes that one of the major drivers of the rise in silver demand is the surge in consumption by automobile manufacturers, which is increasing as more electronics are used in vehicles. The wide adoption of 5G technologies and the global drive towards green energy is also impacting demand. For example, producers of solar panels are increasingly hoarding the metal. Finally, silver demand in India nearly doubled this year as consumers took advantage of low prices to replenish inventories that declined in 2020 and 2021.
READ MORE: Gold plummets to two-year low
Silver prices have dropped roughly 10% this year to $21 an ounce, largely due to investors selling the metal in response to the strengthening of the US dollar and the surge in US bond yields.
For more stories on economy & finance visit RT’s business section
