The global silver market is heading for its sixth consecutive annual supply deficit in 2026, with the projected shortfall reaching 46.3 million troy ounces — up 15% from 40.3 Moz in 2025 — according to the World Silver Survey 2026 published by the Silver Institute and Metals Focus on April 15, 2026.
The deficit reflects a structural imbalance that has persisted since 2021, during which the market has drawn down a cumulative 762 to 820 million ounces from above-ground stocks to cover the gap between industrial demand and available supply. To contextualise that figure: it represents nearly a full year of global silver mine output, which the Silver Institute estimates at approximately 820 Moz annually.
Supply-Side Headwinds
Total global silver supply is expected to contract by approximately 2% in 2026, the survey reports. Mine production faces headwinds from depleting reserves at several primary silver operations, declining ore grades, and operational disruptions in key producing regions — most notably Mexico, the world's largest silver producer, which accounted for roughly 202 Moz in 2024.
Secondary supply (recycling) is expected to increase modestly but remains insufficient to close the widening gap. The Silver Institute notes that recycling rates for silver used in solar panels remain below 5%, creating a one-way consumption pattern that accelerates above-ground stock depletion.
COMEX Inventory Drawdown Accelerates
Exchange inventories tell a stark story. COMEX registered silver stocks have fallen from approximately 531 Moz in October 2025 to roughly 315 Moz — a decline of more than 40% in roughly seven months. This is not a blip; it is the continuation of a multi-year trend that has seen COMEX registered inventory drop over 80% from its 2021 peak.
The pace of withdrawals has accelerated in 2026. In January alone, a single week saw 33.45 Moz withdrawn (26% of deliverable supply at the time). March delivery absorbed 46.1 Moz — roughly 60% of registered inventory at that point. These figures represent physical metal leaving exchange vaults for industrial consumption and investor delivery, not mere book transfers.
What Six Years of Deficits Mean
A deficit in a given year does not automatically generate a price spike — above-ground stocks can buffer the gap. But six consecutive years of deficits have progressively eroded that buffer. The cumulative draw since 2021 now exceeds total global mine output for a full year. Above-ground inventories that once represented months of comfortable supply have been drawn down to what analysts describe as "operationally tight" levels.
The Silver Institute notes that global silver demand is increasingly inelastic — solar panel manufacturers and electronics producers cannot easily substitute away from silver, and the metal's use in fast-growing sectors such as EVs and AI data-centre infrastructure continues to expand. This means demand remains robust even as prices correct from the January 2026 record of $121.62/oz, with spot silver now trading in the low $70s.
Since 2021, the cumulative structural deficit in silver has reached 762 Moz — equivalent to roughly 93% of annual mine production. Despite a 35% price correction from January's all-time high, the deficit is projected to widen further in 2026 as supply contracts and industrial demand continues to grow at 4–6% annually, outstripping mine supply growth of just 1–2%.
Outlook
The Silver Institute's projection of a sixth consecutive deficit reinforces a thesis that has become consensus among precious metals analysts: the silver market has entered a period of structural undersupply driven by industrial megatrends — solar photovoltaics, electrification, and digital infrastructure — that show no signs of abating. The question for the second half of 2026 is not whether the deficit will persist, but at what point the erosion of above-ground stocks begins to force a more dramatic price adjustment.
As one analyst at Metals Focus summarised: "We have been drawing on inventory for six years. Inventory is finite. At some point, the buffer runs out."