Silver mine supply is struggling to grow despite prices above $55/oz for most of 2026. The Silver Institute projects global mine output of 825 million ounces this year, essentially unchanged from 2025's 822 Moz. The supply response to higher prices has been muted, constrained by declining ore grades, permitting delays, and labor costs.
A structural constraint on silver supply is that 72% of production comes as a by-product of base metal mining — primarily copper, lead, and zinc. This means silver output is largely determined by base metals mining decisions, not silver prices. Copper mine expansions boost silver supply, but copper mine closures create deficits that silver prices alone cannot fill quickly.
Mexico, the world's largest silver producer, saw output fall 2.1% in H1 2026 versus the same period in 2025. Fresnillo plc, Mexico's largest primary silver miner, reported a 3.4% decline in silver production due to lower ore grades at the Saucito and Fresnillo mines. The company's 2026 guidance of 55-58 Moz is below the 60 Moz produced in 2023.
Peru, the second-largest producer, has also struggled. Buenaventura's silver output was down 1.8% year-over-year in Q1 2026. While the company's new Yumpag project is ramping up, it is primarily a gold asset with silver as a by-product. The broader trend in Peruvian mining is toward copper — silver is increasingly seen as a secondary value stream.
Above-ground silver inventories, tracked by the London Bullion Market Association (LBMA) and Comex, are providing a buffer. Combined LBMA and COMEX silver stocks stand at approximately 28,000 tonnes, down 6% from the 2025 peak but still above the 10-year average. These inventories can supply 6-8 months of industrial demand at current consumption rates.
Recycling is a growing but insufficient source. Silver recycling reached 185 Moz in 2025, up 4% from 2024, driven by higher prices and increased scrap collection from the photographic and electronics sectors. However, recycling remains only 22% of total supply, constrained by the long lifecycle of silver-containing products.
Flat mine supply means every demand-driven rally will be amplified. The silver market is structurally dependent on copper and zinc mining decisions that you cannot predict. For procurement: maintain 60-90 days of inventory if silver is a critical input. The by-product supply structure means you can't rely on silver prices alone to incentivize more production during tight periods.