Current Silver Status into 2026

As of late 2025, the global silver market is in a state of acute tension, characterized by persistent supply deficits, record-breaking prices, and depleting inventories. Silver has outperformed expectations, surging over 125% year-to-date to all-time highs above $67 per ounce. This report examines the current status, including where the extra silver has come from to bridge the supply-demand gap, the situation in November and December 2025, and forecasts for early 2026.

The market has faced its fifth consecutive year of deficits, with cumulative shortfalls since 2021 exceeding 820 million ounces. Mine production has declined, while industrial demand--driven by solar, EVs, and AI--remains at record levels. To visualize the scale: the 2025 deficit alone is estimated at 95-206 million ounces, equivalent to roughly 2,953-6,406 metric tonnes, or 144-313 semi-trucks at full capacity.

Global Silver Supply: Declining Production Amid Challenges

Silver mine production for 2025 is estimated at around 835 million ounces, marking a decline of about 7.23% from 2016 levels. Top producers include Mexico (6,300 tonnes), China (3,300 tonnes), and Peru (3,100 tonnes). However, aging mines, rising costs, and environmental regulations have hampered output. No major new discoveries or projects have come online to offset this trend.

Total supply, including recycling and above-ground stocks, remains insufficient. Geopolitical factors, such as power crises in South Africa and sanctions on Russia, indirectly affect silver through related metals markets.

Surging Demand: Industrial Sectors Fuel the Crunch

Industrial demand accounts for 60-70% of total silver usage and hit record highs in 2025, despite a projected 2% decline from 2024's 680.5 million ounces. Key drivers include solar (over 50% growth in capacity), EVs (CAGR 3.4% through 2031), and AI/semiconductors (data centers using 3x more silver).

Demand is price-inelastic--industries like Big Tech and renewables will pay premiums to secure supply, as seen in off-take deals reaching $85 per ounce.

Bridging the Gap: Where Has the Extra Silver Come From?

With annual supply consistently falling short of demand by 95-206 million ounces in 2025 alone, the market has drawn from above-ground stocks. This includes:

• Depleting exchange inventories (e.g., COMEX and LBMA vaults, down 50% from peaks).
• Increased recycling (though limited by available scrap).
• Hedging and paper market mechanisms, which delay but don't resolve physical shortages.

The cumulative drawdown since 2021 (~820 million ounces) has strained global vaults, leading to warnings of potential physical defaults.

Late 2025 Status: November and December Crunch

In November and December 2025, silver prices shattered records, peaking at $67.38 per ounce amid acute shortages. COMEX inventories stood at ~453-454 million ounces, but over 60% of registered stocks (~270 million ounces) were claimed for delivery in early December--signaling a severe drain. LBMA stocks showed volatility, with November data indicating continued depletion despite earlier replenishments.

Physical flows included unusual air shipments to the US, and market whispers of soaring premiums in direct deals. Sentiment on platforms like X highlighted FOMO buying from China and Russia, exacerbating the runaway.

Forecast into Early 2026: The Great Squeeze Ahead

Entering 2026, analysts project prices at $65-200 per ounce, with averages around $56-92 in Q1. Continued deficits (growing due to inelastic demand) and factors like Fed rate cuts could drive further surges. China's export curbs (effective Jan 1) and green energy mandates amplify risks.

If inventories hit rock bottom, expect a "force majeure" event, decoupling paper and physical prices. Bullish outlook: $100+ possible; bearish: Potential slowdown if economic weakness curbs demand.