Silver market expected to record a sixth consecutive annual supply deficit in
2026, despite overall demand from manufacturing, jewelry and investment
bars/coins falling about 5% to 1.08 bln oz — roughly 35 mln oz above combined
mine and recycling supply. Elevated prices have prompted substitution and
reduced silver use by jewelers and manufacturers; photovoltaic silver demand is
set to plunge about 21% this year. Metals Focus managing director Newman says PV
demand has likely peaked and will soften further, though it remains a meaningful
component for several years. BMO analysts call the market at an inflection
point: PV accounted for roughly 55% of incremental silver demand over the past
five years, but slower installations and efficiency gains could erase about half
of that gain by 2030, shifting PV from primary growth driver to a clear drag.
BMO warns conventional shortage metrics can mislead and prefers comparing supply
to manufacturers’ and jewelers’ actual consumption, and expects a widening
surplus that must be absorbed by investors. Newman expects non-solar industrial
silver use to rise about 4.5% this year and notes institutional holdings are
low, leaving room for investors to rebuild positions if sentiment improves.
