As the Commodities Research Lead, I have analyzed the 2025 World Silver Survey and current market data. The global silver (XAG) market is navigating its fifth consecutive year of structural deficit in 2025, driven by record industrial fabrication and stagnant mine supply.

Current Supply-Demand Imbalance

The 2025 World Silver Survey, released by the Silver Institute and Metals Focus, confirms a projected market deficit of approximately 149 million ounces (Moz) for 2025. While this is a 19 percent reduction from the 2024 deficit of 184 Moz, it contributes to a massive cumulative five-year shortfall exceeding 800 Moz.

Total global supply is forecast to rise 3 percent to 1.05 billion ounces, reaching an 11-year high. This growth is supported by a 2 percent increase in mine production to 844 Moz, led by project ramp-ups in Canada and Chile. However, recycling growth remains modest at 1 percent. Total demand is projected to stay stable at 1.20 billion ounces, as surging industrial usage offsets declines in the price-sensitive jewelry and silverware sectors.

Industrial Demand Trends

Industrial fabrication is the primary engine of the silver market, forecast to exceed 700 Moz for the first time in 2025.

Photovoltaic (PV) Sector
The solar sector remains the single largest driver of industrial demand. Despite aggressive thrifting—reducing the silver paste used per cell—total demand is buoyed by massive installation volumes. Global PV capacity is expected to reach record highs in 2025, with the Silver Institute forecasting over 5,200 tons of silver consumption for this sector alone. The shift toward higher-efficiency N-type cells, which require more silver than older technologies, further supports demand.

Electric Vehicle (EV) and Automotive Sector
The automotive industry is experiencing a silver multiplier effect. An average battery electric vehicle (BEV) contains 25 to 50 grams of silver, roughly double the 15 to 28 grams found in internal combustion engine (ICE) vehicles. Demand in 2025 is driven by the electrification of powertrains, advanced driver-assistance systems (ADAS), and the expansion of charging infrastructure. Fast-charging stations alone require 15 to 25 ounces of silver per installation. Automotive silver demand is projected to grow at a compound annual growth rate (CAGR) of 3.4 percent through 2031.

Next-Generation Technology
Beyond green energy, the 2025 Survey highlights the impact of Artificial Intelligence (AI). AI-related data centers require high-density power systems that consume significantly more silver than traditional server infrastructure. This, combined with 5G expansion, creates a non-discretionary demand floor that is less sensitive to price fluctuations than retail investment.

XAG Price Performance and Outlook

Reflecting these fundamentals, silver prices (XAG/USD) have seen historic volatility and strength. After averaging 28.27 dollars in 2024, spot prices surged through 2025, hitting all-time highs above 50 dollars in late 2024 and continuing toward 88 dollars by early 2026. This price action is fueled by the depletion of above-ground stocks and a significant liquidity squeeze in major exchange vaults.

While high prices are encouraging some thrifting and recycling, the structural nature of green-tech demand suggests the deficit will persist, with a sixth consecutive shortfall already forecast for 2026.

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