Silver at $75.45/oz as Sixth Consecutive Annual Deficit Tightens Market Fundamentals

The Silver Institute's mid-year update confirmed that the 2026 silver market deficit will reach approximately 5,500 tonnes, in line with the 5,800-tonne deficit of 2025. The cumulative deficit over six consecutive years has drawn down above-ground inventories from an estimated 45,000 tonnes in 2020 to approximately 28,000 tonnes in mid-2026 — the lowest level in three decades.

The structural deficit is driven by the widening gap between industrial demand growth and stagnant mine supply. Global silver industrial demand reached a record 620 million ounces (19,300 tonnes) in 2025 and is projected to grow another 4% in 2026 to 643 million ounces (20,000 tonnes). Solar PV manufacturing is the single largest growth driver, accounting for 220 million ounces (6,800 tonnes) in 2025, up from 170 million ounces in 2023.

Mine supply remains constrained at approximately 26,000 tonnes annually, with the industry unable to grow production despite record prices. New mine projects face 10-15 year development timelines, declining ore grades at primary silver mines, and increasing ESG-related permitting delays. Approximately 72% of global silver production comes as a by-product of copper, lead, and zinc mining, meaning that primary silver economics do not directly drive production decisions.

The deficit is increasingly being met by a drawdown of above-ground inventories, but these stockpiles are finite. The Silver Institute estimates that accessible above-ground inventories — excluding central bank holdings of gold, which are not readily convertible — will be depleted to 22,000 tonnes by end-2027 if the deficit continues at current levels. At that point, the market would face a structural availability crisis.