Industrial Silver Demand Outside Photovoltaics Forecast to Grow by 4.5%
(November 12, 2026) – The global silver market is forecast to record its sixth consecutive annual deficit in 2026, with demand exceeding supply by 35 million ounces (Moz). Industrial silver demand outside photovoltaics is expected to rise by 4.5% this year, partially offsetting lower consumption in solar cells, where elevated silver prices have accelerated thrifting and substitution.
Total silver demand is forecast at 1.08 billion ounces in 2026, down 5% year-over-year (y/y), as higher prices also weigh on jewelry and silverware purchases. Industrial demand is expected to reach 640Moz, around 22% above its 2019 level, despite a 3% decline this year. Mine production is forecast to remain broadly flat, while recycling is projected to rise by 6%.
These are some of the key findings reported by Philip Newman, Managing Director at Metals Focus, and Sarah Tomlinson, Director of Mine Supply, during the Silver Institute’s Annual Silver Industry Dinner in New York this evening, which featured supply and demand estimates for 2026. The following are some of the key highlights from their presentation:
- The silver price surged to a record high of US$121.65/oz on January 26, supported by strong investment and tight physical liquidity in London. Prices subsequently retreated to $52/oz by November 4, down 27% since the start of the year, as shifting US interest rate expectations, dollar strength and rising bond yields weighed on investor sentiment for the entire precious metals complex. The gold:silver ratio fell to 43 in January, its lowest level since 2011, before returning to the high 70s by early November.
- Silver exchange-traded product holdings have recovered by 24Moz since end-June, partially reversing the first-half outflows. Buying has been uneven, with concerns over US government debt and changing interest-rate expectations encouraging inflows at times, while higher bond yields have constrained the recovery. By November 3, global holdings stood at 1.25 billion ounces, down 4% or 55Moz since the start of the year. For the full year, Metals Focus is forecasting net outflows of 45Moz.
- Global silver demand is forecast to decline by 5% y/y to 1.08 billion ounces in 2026. Jewelry is expected to see the largest reduction in ounces, followed by silverware and industrial demand. Bar and coin demand is forecast to record a more modest decline of 2%.
- Industrial demand, excluding photovoltaics (PV), is forecast to rise by 4.5% to 492Moz in 2026. Automotive demand remains resilient, supported by vehicle electrification and expanding charging infrastructure. Demand for brazing alloys and solders is also expected to edge higher. In PV, installations have fallen short of expectations, particularly in China, while record silver prices have accelerated thrifting and substitution. Overall, total industrial demand is projected to reach its fourth-highest level in Metals Focus’ series.
- Silver jewelry and silverware demand are forecast to decline by 22% and 17%, respectively, in 2026. Higher prices and weaker rural spending in India are encouraging purchases of smaller, lighter products. Changing consumer preferences in China and subdued demand in Europe and the US are also weighing on jewelry volumes. However, pockets of resilience remain: gold-plated silver designs are attracting Indian buyers seeking lower-cost alternatives to gold, while branded silver jewelry in the US is better placed to absorb higher metal costs.
- Bar and coin demand is forecast at 215Moz in 2026, down 2% y/y but still around 13% above 2024. Exceptionally strong retail investment in late 2025 and early 2026 gave way to far more subdued buying from March as silver prices weakened. US retail investment is expected to reach its lowest level since 2010. Indian demand is forecast to fall by 10% for the year, although a modest recovery has emerged since June, supported by stabilizing prices and concerns over availability amid import restrictions.
- Total mined supply is expected to edge down by 0.5% to 834Moz, as lower output in Peru, China and Argentina offsets gains in Mexico, Russia and Morocco. Primary silver mine production is forecast to rise by 6.5Moz to 233Moz in 2026. Mexican production is forecast to increase by 6.6Moz to 174Moz, supported by improved grades and recoveries at Peñasquito, the restart of Tizapa and Terronera’s first full year of commercial operations. Turning to costs, in H1.26, average all-in sustaining costs (AISC) for primary silver mines jumped by 47% to $16.27, reflecting lower ore grades, higher input costs, royalties, and sustaining capital expenditure. However, strong silver prices in H1.26 meant margins for these mines surged 187% to $62.19.
- Recycling is forecast to rise by 6% to 210Moz in 2026, its highest level since 2012. Higher industrial scrap supply, largely reflecting structural factors, is the main contributor. Jewelry recycling is also expected to increase, particularly in China, India and Turkey, as elevated prices encourage selling.
- The silver market is forecast to record a deficit of 35Moz in 2026, bringing the cumulative shortfall for 2021-26 to approximately 746Moz. The narrower shortfall and metal released through ETP selling have helped ease physical market tightness.
Silver Supply and Demand
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Press Contact Details
Michael DiRienzo
The Silver Institute
Phone: +1.202.591.2480
Email: mdirienzo@silverinstitute.org
Philip Newman
Metals Focus
Phone: +44.20.3301.6510
Email: philip.newman@metalsfocus.com