The silver market is showing a rather unusual situation: demand is declining, but the metal has remained in deficit for the sixth consecutive year.
According to a new forecast from the Silver Institute and Metals Focus, global silver demand in 2026 will total around 1.081 billion ounces, 5% lower than last year. At the same time, supply is estimated at 1.045 billion ounces. The difference is approximately 35 million ounces.
The reasons for the decline in demand are quite interesting. Silver consumption in the jewelry industry could fall by 22%, while use in silverware production could drop by 17%. Solar panel manufacturers have also begun reducing their use of the metal and seeking alternatives because of its high cost.
However, there is also an opposite trend: industrial demand excluding solar energy is forecast to grow by 4.5%. The electrification of transport and the development of charging infrastructure continue to support consumption.
There is another wrinkle: forecast outflows of 45 million ounces from exchange-traded investment products could release additional silver onto the market. Taking these flows into account, the estimated balance even shows a small surplus.
So, a sixth consecutive year of deficit does not necessarily mean prices will rise. For silver, not only mining output and consumption matter, but also investor behavior.