Global silver market faces structural supply deficit

The global silver market is experiencing a significant structural deficit, entering its sixth consecutive year of demand outstripping supply. Since 2021, the cumulative deficit has reached approximately 762.3 million ounces, significantly depleting above-ground stockpiles.

Forecasts for 2026 suggest a projected shortfall of 46.3 million ounces, with total global demand expected to reach 1,112.6 million ounces against a supply of 1,066.4 million ounces. Visible inventory across global exchanges has fallen to levels covering only about 155 days of global demand.

Industrial demand remains a primary driver, particularly in electrical grid infrastructure and AI data centers, despite a 19% drop in silver demand within the photovoltaic sector due to material savings. Because nearly 80% of silver is produced as a byproduct of base metal mining, supply is considered structurally inelastic, meaning price increases cannot immediately trigger significant new primary production.