Silver Institute: Supply Crunch Ahead!
The Silver Institute has released its annual World of Silver Survey for 2017 which gives an overview of the broader dynamics shaping the global silver market.
Reading through the findings tells us that we are in a very interesting place indeed with silver. We are on a precipice, poised for major breakthroughs in silver demand in the near future.
One key finding was something we’ve been excited about for a long time – SOLAR. Sure enough:
“…new highs were recorded for silver’s use in the photovoltaic and ethylene oxide sectors, both growing and significant industrial applications for silver.”
But unfortunately this report is not all good news. There are supply concerns that you should know about.
Will you have trouble finding a silver supplier in the near future?
Supply and demand don’t lie. More companies are using silver in their production and less is being mined from the ground. What does that do for the price?
Global Silver Mine Production Drops
That hasn't happened since 2002. Mine production declined by 0.6% which is small, but coupled with a decreased level of scrap silver available, which reached the lowest levels since 1996, there were 32.6 million fewer ounces of silver available in 2016.
Not only that, but demand actually decreased except for the one bright spot of solar. The solar industry's use of silver rocketed to an increase of 34% in 2016! But other industrial uses were down, signaling overall economic weakness.
Surprisingly, investment demand was also down, signaling that investors may not be aware of (or being honest with themselves about) the true economic picture we are facing - yet.
Under normal circumstances, either industrial demand or safe-haven demand should be increasing, depending on the strength or weakness of the economy; but when BOTH are down, we are not in Kansas anymore, so to speak.
We are at a crossroads. Either the economy will firm up and take industrial demand for silver with it, or the economy will tank and push safe haven investment demand for silver sky-high. Eventually one of those has to happen, so which is it: a soaring economy which drives up demand for silver in solar and other industries or a crash in which silver becomes a safe haven investment.
BUT even with silver demand down, something truly incredible happened. Silver prices posted a whopping 9.3% increase in 2016 ANYWAY.
This speaks to what you should really be concerned about - SUPPLY.
Supply fell MORE than demand, which is what drove the price of silver in 2016. And the supply crunch is only getting worse. This points to a troubling situation in the future for those who will be eventually looking to silver as a safe haven if/when we are hit with another major recession or worse.
Thousands of investors will be looking to silver to help them ride out the economic storms, but the lifeboats will all be gone.
If this supply crunch continues, and the investment world is forced to come face-to-face with the uncertain economic situation we find ourselves in, you might have trouble getting your hands on the silver you know you need for your future.
Thousands of investors won't heed this warning and will be caught off guard - AGAIN.
Don't be one of them.