Despite strong supply growth and some fabrication demand destruction from elevated prices, the market posted its
fifth straight annual deficit in 2025.Silver prices staged a dramatic rally, averaging
$40.03/oz (+42% year-over-year), with intra-year highs exceeding $121/oz in early 2026.SilverTrade compiled a concise analysis and summary tailored for silver investors.
- Mine production: +3% to 846.6 Moz.
Gains were concentrated in Central/South America (Peru +7%, Chile +8%) thanks to brownfield expansions and grade improvements (e.g., Antamina).
Offsets included Mexico (-5%) due to operational and policy issues.
Primary silver mines accounted for ~26% of output; the rest was by-product from lead/zinc, copper, and gold operations.Recycling: +2% to 197.6 Moz — the highest level in 13 years. Price-driven selling from jewelry and silverware scrap (especially in India) more than offset softer industrial scrap.
Mine output is projected to dip slightly (-0.3% to 844.1 Moz), while recycling jumps +7% to 211.3 Moz. Total supply is forecast to ease modestly. New projects remain limited by long lead times; the industry is relying on incremental expansions rather than major discoveries.
- Industrial (58% of total demand): -3% to 657.4 Moz. The first post-pandemic decline was driven by photovoltaic (PV/solar) thrifting and substitution (-6% to 186.6 Moz). Gains in AI data centers, EVs, grid infrastructure, and electronics partially offset the drop.
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Jewelry: -8% to 189.3 Moz; Silverware: -21% to 42.1 Moz. Price sensitivity hit India and Europe hardest.
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Photography: -5% to a multi-decade low of 24.2 Moz.
Industrial demand expected to ease another 3%, jewelry and silverware to fall further, but coin/bar demand projected to rise +18%. Total demand softens modestly to ~1,112.6 Moz.
- 2025 market deficit: 40.3 Moz (1,252 tonnes) – the fifth consecutive year, though sharply narrower than 2024 due to stronger supply and softer fabrication demand.
- Visible inventories drew down further, contributing to thinner liquidity, volatile lease rates, and outsized price swings (notably in October 2025).
2026 forecast: A sixth consecutive deficit of 46.3 Moz is expected, even as total supply and demand both ease slightly. The market will continue to rely on above-ground stock drawdowns to balance.
Earlier 2026 preliminary outlooks from the Silver Institute and analysts had already flagged strong physical investment as a key support.
- Physical stacking remains compelling: Coin and bar demand is holding strong even after a massive price rally – proof that retail investors are treating silver as both a monetary asset and an industrial play. Persistent deficits and inventory draws argue for continued accumulation on dips.
- ETFs and paper products: Strong 2025 inflows highlight institutional interest. With physical market tightness (evidenced by leasing spikes and COMEX/London outflows), premiums on physical products could widen in future rallies.
- Mining equities: Producers enjoyed record margins in 2025. Look for companies with low AISC, primary silver exposure, and growth pipelines (especially in Peru, Chile, and Russia). Hedging activity may cap upside for some names but provides cash-flow visibility.
- Risks to monitor:
- Further thrifting/substitution in solar and electronics could cap industrial demand growth.
- A sharp global recession could temporarily weigh on investment demand.
- Geopolitical or macro shocks could amplify volatility in either direction.
Big Picture for Silver:
The 2026 World Silver Survey paints a picture of a maturing bull market underpinned by structural supply deficits that show no signs of abating.
While 2025’s price surge caused some demand destruction in price-sensitive fabrication sectors, investment demand stepped up to fill the gap – and is expected to do so again in 2026.
For long-term silver investors, the report reinforces the case for owning the physical metal and quality producers as the market enters what could be an extended period of tightness and higher average prices.
The full report is available for download on the Silver Institute website:
https://silverinstitute.org/wp-content/uploads/2026/04/World-Silver-Survey-2026.pdf
Die hard silver bugs should treat this annual benchmark as required reading – it remains the most authoritative source on the fundamentals driving silver’s next leg higher.
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