Silver Market Faces Sixth Annual Supply Deficit in 2026

The silver market is projected to experience its sixth consecutive annual supply deficit in 2026, with demand expected to exceed supply by 35 million ounces. Total demand from investors, jewelers, and manufacturers is forecast to drop 5 percent to 1.08 billion ounces this year.

The Silver Institute reports that a 21 percent slump in demand from the solar industry is a primary driver of this decline, as producers reduce the use of silver in photovoltaic panels. While solar demand falls, industrial consumption in other sectors is forecast to rise by 4.5 percent.

Bank of Montreal analysts have challenged these deficit measures, arguing that they are misleading because they include bar and coin purchases that remain in above-ground inventories. The bank predicts an increasing surplus when focusing exclusively on jewelry and industrial consumption, suggesting that investors will be required to absorb the excess metal.