Global silver mine production was essentially flat at 172 Moz in Q1 2026, up just 0.3% from Q1 2025, according to the Silver Institute. Mexico, the world's largest producer, saw output decline 2.1% to 48 Moz as grades at Peñasquito continued to decline and Fresnillo's Saucito mine faced ventilation constraints.
Peru's production rose 3.4% to 38 Moz, driven by higher output at the Uchucchacua mine following Buenaventura's expansion investment. Bolivia added 2 Moz from new capacity at the San Cristóbal operation. China's production held steady at 25 Moz.
By-product silver from copper and lead-zinc mines accounts for 72% of primary production. The copper concentrate market remains tight, limiting by-product silver availability. Lead-zinc mine output was flat globally in Q1 as zinc prices remained rangebound.
Secondary supply from recycling reached 38 Moz in Q1, up 1.5% year-over-year. Industrial scrap from the electronics sector increased 2.3% as higher silver prices during 2025 incentivized recovery. Photovoltaic scrap remains a nascent but growing source, contributing an estimated 4 Moz in Q1.
The structural supply-demand deficit persists at an annualized rate of approximately 250 Moz, as total demand of 1,325 Moz (annualized) exceeds total supply of 1,075 Moz (annualized). Exchange inventories and above-ground stocks continue to fund the gap, drawing down at an accelerating rate.
The persistent deficit means silver prices have structural upward bias over multi-year horizons. Use Q2 2026 price corrections to layer in hedge positions. The by-product supply constraint is not easily resolved — new primary silver capacity requires $18-20/oz incentive pricing.