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SILVER is heading for a sixth consecutive annual supply deficit in 2026, despite falling industrial demand from solar panel manufacturers, Bloomberg reported.
Demand from manufacturers, jewellers and investors is forecast to decline 5% to 1.08 billion ounces this year, according to preliminary estimates from the Silver Institute.
That would still leave a supply shortfall of 35 million ounces, although the deficit is narrowing as manufacturers reduce their use of the metal in response to high prices.
Silver demand from the solar industry is expected to fall 21% this year as manufacturers seek cheaper alternatives or reduce the amount used in photovoltaic panels.
“I would actually say that the record level of solar demand is behind us, and it will continue to weaken,” said Philip Newman, managing director of Metals Focus, which compiles the Silver Institute's figures.
BMO Capital Markets expects solar demand to remain under pressure. The sector accounted for 55% of silver demand growth over the past five years, but could surrender roughly half those gains by 2030.
BMO also questioned conventional measures of silver deficits, arguing that investment purchases should not be treated as permanent consumption because the metal can return to the market.
Excluding investment demand, the bank expects growing surpluses.
However, industrial demand outside solar is forecast to increase 4.5% this year. Newman said renewed investor interest could also support the market after silver's volatile performance in 2026.