Based on the Silver Institute’s 2026 World Silver Survey data and recent market analysis, the silver market is entering its sixth consecutive year of structural deficit. Below is the macroeconomic evaluation of supply, industrial demand, and the sustainability of remaining bullion inventories.

Macroeconomic Supply-Demand Balance (2026 Forecasts)

Global Silver Supply
Total global supply is projected to reach a decade high of 1.05 billion ounces, a 1.5 percent increase over 2025.
Mine Output: Forecasted at 820 million ounces, up 1 percent. Growth is led by primary silver mines in Mexico and the Jiama polymetallic mine in China.
Recycling: Expected to exceed 200 million ounces for the first time since 2012, driven by record-high prices incentivizing the scrap of silverware and electronics.

Global Silver Demand
Industrial Fabrication: Projected to decline by 2 percent to 650 million ounces, a four-year low. This contraction is a direct response to record price levels which have accelerated "thrifting" and substitution.
Solar Photovoltaic (PV) Sector: Despite a 15 percent growth in global solar installations, silver demand from PV is expected to fall to approximately 194 million ounces (a 7 percent year-on-year decline). Manufacturers are shifting toward copper-plated cells or reducing silver loading to manage costs, which now represent 17-29 percent of PV module expenses.
Electric Vehicle (EV) and Automotive Sector: Demand remains a structural growth pillar, with automotive silver consumption forecasted to reach 25-30 million ounces in 2026. EVs consume 25-50 grams of silver per vehicle, roughly 70 percent more than internal combustion engine (ICE) vehicles.
Physical Investment: Forecasted to surge 20 percent to a three-year high of 227 million ounces, offsetting the dip in industrial and jewelry demand.

Structural Deficit and Inventory Sustainability

2026 Projected Shortfall: 67 million ounces.
Cumulative Deficit (2021-2025): Approximately 800 million ounces, equivalent to a full year of global mine production.

Inventory Status
The persistent shortfall has forced a massive drawdown of above-ground bullion stocks. COMEX registered inventories—the metal readily available for delivery—plunged to approximately 82-88 million ounces in February 2026, a 75 percent decline from 2020 levels. LBMA and Shanghai exchange stocks have similarly hit multi-year lows.

Sustainability Assessment
Current bullion inventories are under extreme duress and cannot indefinitely sustain the current rate of deficit. While the 2026 projected shortfall of 67 million ounces is smaller than the 117 million ounce deficit of 2025, the "deliverable" pool of silver is reaching a liquidity vacuum. China’s implementation of silver export licenses in early 2026 has further restricted the flow of refined metal to Western hubs like London and New York.

Conclusion
The silver market is in a state of "industrial gravity" where necessity-driven demand from the energy transition is clashing with exhausted exchange vaults. While total supply is at a decade high, the 1 percent growth in mine output is inelastic and insufficient to close the gap. Bullion inventories can likely bridge the 67 million ounce gap for 2026, but the margin for error has vanished, leaving the market highly vulnerable to any further supply disruptions or spikes in investment demand.
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