A US-based agency which monitors the silver market says in its latest report that the world is on the brink of a major silver supply shortage this year.

The Silver Institute notes in the report published on its website, that global demand for the precious metal from industrial consumers, manufacturers of housewares and jewelry, and retail investors will rise at the end of the year by a record 16% over last year, to an all-time high of 1.21 billion ounces.

This would leave the silver market with a multi-year deficit 194 million ounces of silver, which is 400% of the level seen in 2021 of 48 million ounces. London silver inventories and New York inventories, which are tracked by COMEX and the London Bullion Market Association (LBMA) were already short by roughly 370 million ounces, or 25% over the course of this year, according to the report.

According to the report, one of the major drivers of the increased consumption is the increase in demand for silver being seen in the automobile sector, where the rise of electric vehicles and the increase in electronic devices included in vehicles has driven up the amount of silver used per vehicle manufactured.

The report notes the rollout of 5G as well as the rise in green technologies like solar panels are also driving increased demand. Solar panel manufacturers, concerned about future shortages, are increasingly hoarding the metal as well.

Finally, the report notes that silver demand in India has doubled this year, as consumers utilized low prices to replenish stores which had been depleted in 2020 and 2021.

Thus far this year, silver has fallen in value roughly 10% to $21 per ounce as investors moved out of the metal due to the stronger dollar and the surge in yields of US bonds.