The Silver Institute's mid-year update confirmed that the global silver market remains in structural deficit for 2026, though the gap has narrowed significantly from the 52 Moz deficit recorded in 2025. Total supply is projected at 1,020 Moz against demand of 1,055 Moz.
Mine production is the bright spot. New operations in Mexico, including the Fresnillo plc Juanicipio expansion, added approximately 15 Moz of annual capacity. Ramp-ups in Peru and Argentina contributed another 8 Moz. Silver's by-product nature (70% of production comes as a co-product of copper, lead, and zinc mining) means base metal demand cycles correlate directly with silver supply.
Industrial demand, which accounts for 55% of total silver consumption, grew at a slower pace of 2.1% in 2026 versus 7.4% in 2025. The deceleration is primarily due to a normalization of electronics and semiconductor demand after a two-year boom. Solar PV demand remains the fastest-growing segment at 12% annually, but the rate has softened from 24%.
Investment demand (bars, coins, ETFs) absorbed 180 Moz in H1 2026, up 5% year-on-year. Retail coin demand in North America, however, slowed as premium-to-spot ratios compressed. The structural deficit provides a fundamental backstop, but the narrowing gap reduces the urgency for price discovery to the upside.
The narrowing deficit reduces upward price pressure but does not eliminate it. The silver market remains in a structural shortfall for six consecutive years. For procurement, this means any price dips toward $65-68 should be viewed as accumulation zones. Lock in 20-30% of annual volume at these levels.