Global silver market supply and demand dynamics

The global silver market has been characterized by a significant structural deficit, marking six consecutive years where demand has outstripped supply. Since 2021, the cumulative deficit has reached approximately 762.3 million ounces, depleting above-ground stockpiles to levels covering only about 155 days of global demand. While industrial demand from electrical grids and AI data centers remains a driver, demand within the photovoltaic sector has seen a 19% drop due to material savings. Because roughly 80% of silver is produced as a byproduct of base metal mining, supply is considered structurally inelastic.

However, some analysts project a potential shift in market conditions. Deutsche Bank predicts the market could transition from a deficit to a surplus by 2027. This projection is based on softening industrial demand—specifically a decline in solar-related demand which has fallen by more than 20% globally—and a decrease in the amount of silver used per solar cell. Additionally, rising inventory levels in major hubs like London, Shanghai, and the Chicago Mercantile Exchange, driven by increased recycling and metal returning from private vaults, support the possibility of a market surplus.