the silver price is not a critical component of the manufacturing cost. You know, if the silver price goes from $30 to $100, that increases the cost of your car by $70. So, if you got a $50,000 car, only 30, that was the old price of silver dollars of that. Now, the new price of silver is $100, let's say. I It's not quite there yet. um the rising price of silver doesn't affect the price of the car very much, but if the car manufacturer can't get his hands on the silver, the entire production line


stops. So wi with this physical shortage we're seeing in the marketplace, there must be um some major worries about from the consumers of silver who are saying, "My god, we've been running what's called just in time supply chain." In other words, we get our silver just in time. We maybe keep two to four weeks supply, which is kind of just in time. The silver market is approaching a point where underlying pressure is no longer quietly building beneath the surface. According to analyst Clive Thompson, the


most important signals right now are not coming from price targets or media headlines, but from the internal dynamics of the futures market itself. When silver prices rise sharply, exchanges tend to see risk rather than enthusiasm. And that risk is rooted in leverage. Rapid price movement immediately places stress on short positions, forcing traders to either post additional capital or exit the market altogether. Thompson warns that this strain is already becoming visible beneath the surface. His primary concern


centers on margin requirements for COX silver futures. Currently, traders are required to post roughly $20,000 per contract. However, given the recent surge in volatility and growing imbalances in market positioning, Thompson believes a margin increase is a near-term risk. He even suggests it could happen as soon as the next trading session. This is significant because margin hikes are more than simple administrative changes. They often trigger forced liquidations, amplify volatility, and expose structural


weaknesses in highly leveraged markets. Uh I've got real numbers here rather than uh imagined numbers or madeup numbers. Uh so on COMX the open interest at the moment is 150,000 contracts of silver. Uh so each contract is 5,000 ounces. So 150,000 contracts of 5,000 is 750 million ounces of open contracts. But the amount of registered silver, that's the silver which can be delivered is only 113 million [clears throat] ounces. So we got contracts of 750 million. That's that's to say people have bought 750


million ounces of silver for future delivery on KMX. But the amount available to be delivered is only 113 million. Now, in [snorts] normal times, you'd say there's nothing to worry about, particularly except that this 113 million ounces is way down from the figure it was 5 years ago. So, the deliverable silver has been going down. Um, and presumably the number of open I don't have the figure on the number of open contracts, but presumably the number of open contracts has been going up. Now, it's no problem if only one in


eight of these contracts ask for delivery. If they do, basically they'll absorb all of the silver in comx and there won't be anything left. Um, realistically speaking, uh, people roll over their contracts. So they bought silver, it comes to maturity, they roll it over to a future date and keep rolling and rolling and rolling. Um, but we've seen a very unusual spike in the last year of people actually demanding delivery of the silver they bought on the future market. So in the event that


this 750 million of contracts which have been of answers of contract which have been bought ask for delivery, well there's only 113 million which can be delivered. There isn't enough for everybody. Uh so that could be a concern for the major silver consumers. Um you know the biggest silver consumers are is the solar industry, the solar panel industry. um they they're consuming about just under 30% of all of the production of silver. Um and these are companies like First Solar, Jeno Silver,


Longie Green, Canadian Solar, Trina Solar, those sort of companies. Uh they've collectively consuming 30% of all the silver which is produced. And why is it a concern for them? Well, if they can't get the hands on the silver, production stops. Bam. So whilst they're sensitive to the price of silver, they're far more sensitive to a cut in production. Um the next biggest consumer of silver is the technology industry. Um this would be companies like Samsung, Apple, Nvidia, Intel, Microsoft and so


forth. Um collectively they are uh consuming I don't have the figure but it's probably about 15% of the silver um of the silver production. Uh yeah no it's yeah that's that's actually got that figure. Yes it's about it's between uh between 12 and 15% of all production is going in in their direction. Um the the risk for these companies if they can't get their hands on silver is critical is high to critical. Uh critical basically means they can't make things if they can't get the silver. Uh


the the other consumer of silver are the car companies. These are companies like Tesla, BYD, Volkswagen, General Motors and Ford. Um, collectively, well, not collectively, each of them is is producing something, not producing, needs, something like 500,000 to 5 million ounces of silver a year for their car production. Um, the amount of silver in a car is somewhere between 0.8 O and 1.6 ounces. So the silver price is not a critical component of the manufacturing cost. You know, if the silver price goes from $30 to $100, that


increases the cost of your car by $70. So if you got a $50,000 car, only 30, that was the old price of silver dollars of that. Now the new price of silver is $100, let's say. I It's not quite there yet. Um the rising price of silver doesn't affect the price of the car very much. But if [snorts] the car manufacturer can't get his hands on the silver, the entire production line stops. So wi with this physical shortage we're seeing in the marketplace, there must be um some major worries about from


the consumers of silver who are saying, "My god, we've been running what's called uh just in time supply chain." In other words, we get our silver just in time. We maybe keep 2 to 4 weeks supply which is kind of just in time but actually we now can't get the we we've just used a week's worth of that supply. We can't get the new week because the silver isn't there. Nobody we can't find it. Um so every every major company which needs to use silver in it man well


every company let's say who needs silver in its manufacturing process must be now starting to um I don't want to use the word panic but in a rush to make sure they're going to be able to lay their hands on the silver that they absolutely have to have to keep the production going. So what will they be doing? They'll be uh going out and looking to see if where they can borrow it and at what price. They'll be looking to see if they can maybe secure an agreement with a mining company to guarantee the


delivery of silver on an ongoing basis. Um but you know the maybe they'll say we don't need 3 weeks uh uh supply of silver. We need to have six or eight or 10 weeks of supply of silver in storage just in case uh we can't get our hands on silver. Uh so there is a a bit of a problem there. Um just to put these numbers in perspective, I'll give you the full annual mind production. So the annual mind production for 2025 is estimated at 985 million ounces and the demand in 2025 is estimated at 1,12


million ounces. So that's a shortage of 117 million ounces. Subscribe to the channel and turn on notifications so you don't miss our latest updates on gold and silver markets.