Silver's structural deficit is entering its sixth year. The Silver Institute and Metals Focus project a 46.3 Moz shortfall in 2026, widening from 40.3 Moz in 2025. Total demand of 1.07-1.09 billion ounces runs well ahead of mine supply of roughly 847 Moz. The gap is filled by drawing down above-ground inventories.
COMEX registered silver stocks have fallen from 531 Moz in October 2025 to roughly 85 Moz currently — a decline of 75% from the 2020 peak. Cumulative above-ground inventory drawdowns since 2021 total approximately 762 Moz, equivalent to roughly nine months of global mine output, per the World Silver Survey 2026.
Solar manufacturers cut silver per panel by roughly 19% in response to high prices, reducing PV demand to ~151 Moz in 2026. But investment demand has more than absorbed the slack. Bar and coin demand is forecast to grow mid-teens in 2026, becoming the largest demand component for the first time.
Industrial demand remains structurally supported by EVs, AI data centers, and 5G electronics. Silver use in automotive is growing at 3.4% CAGR through 2031 per the Silver Institute, with EV demand overtaking ICE by 2027. Global manufacturing PMI expanded for a fifth consecutive month in May at 54.0.
The correction from January's $121/oz all-time high to $70/oz has been sharp. But institutional consensus remains above current prices: J.P. Morgan targets $81/oz for 2026, ING at $83, UBS at $85. Citi's bull case at $110/oz assumes the physical deficit continues to tighten.
Silver's deficit narrative is intact despite the price correction. COMEX inventory data shows physical tightness, not speculative excess. The 762 Moz cumulative draw since 2021 means the market has no meaningful buffer. Buyers should watch the gold-silver ratio: at ~61, it signals silver is undervalued relative to gold on a historical basis. Any Fed easing signal would disproportionately benefit silver.