Key Takeaways
- Silver Institute 2026 forecast: 215 Moz deficit the largest physical deficit on record.
- Global silver mine production is projected at 843 Moz for 2026, up just 1.2% from 2025.
- Recycling supply cannot fill the gap: scrap recovery is expected at 187 Moz well short of the shortfall.
- Above-ground silver inventories have declined for four consecutive years.
The Silver Institute’s mid-year 2026 update paints a stark picture for the silver market: a projected physical deficit of 215 million ounces the largest in the organization’s 50+ years of tracking the market. For four consecutive years, the world has been consuming more silver than it mines and recycles.
Supply vs. Demand
| Category | 2026 Forecast (Moz) | 2025 Actual |
|---|---|---|
| Mine Production | 843 | 833 |
| Recycling / Scrap | 187 | 182 |
| Total Supply | 1,030 | 1,015 |
| Industrial Demand | 720 | 680 |
| Jewelry & Silverware | 210 | 206 |
| Physical Investment (bars/coins) | 315 | 298 |
| Total Demand | 1,245 | 1,184 |
| Deficit | -215 | -169 |
Why Prices Haven’t Responded More
The disconnect between a structural deficit and silver’s relatively modest price appreciation ($33.80, up 18% YTD vs gold’s 38%) puzzles analysts. The explanation lies in above-ground inventory drawdowns: the LBMA and Comex vaults still hold approximately 1.2 billion ounces of above-ground silver that can be mobilized to meet demand. But at the current deficit rate, those inventories could be meaningfully depleted within 5–6 years at which point the price response could be dramatic.