Silver availability
Executive summary
The physical availability of silver is constrained today by a multi-year structural deficit—mine output has stalled while industrial and investment demand surged—creating acute stresses in delivery markets and higher prices [1] [2] [3]. That shortage is reinforced by concentrated reserves and recent policy and buying patterns (China export rules, large Indian imports) that can tighten flows further, even as some analysts argue production and recycling could ease pressures over the medium term [4] [5] [6].
1. Supply: production, reserves and the long-running deficit
Global primary silver supply has been essentially flat-to-declining for much of the past decade, with mine production peaking around 2016 and then falling, contributing to persistent deficits reported through 2024–25 [3] [1] [7]. Known reserves remain sizable—U.S. Geological Survey data aggregate roughly 641,400 metric tons—but reserves are concentrated geographically (Peru, Mexico, etc.) and the pace of converting reserves into increased refined output is slow because silver is often a by-product of base-metal mines [8] [7]. Multiple sources cite that the market recorded straight supply deficits into 2025, meaning annual demand has outpaced mine plus recycling supply [9] [1].
2. Demand: industrial transformation is now central to availability
Industrial demand—chiefly photovoltaics for solar, electronics and growing use in AI/data centers—has become a dominant and price-insensitive driver, with solar alone consuming a rapidly rising share of annual supply (over a quarter in recent reporting and rising toward roughly 29% over a decade) and new data-center uses amplifying that trend [10] [1] [11]. Investment flows—ETFs, retail buying and institutional allocations driven by safe-haven sentiment amid macro uncertainty—have added to physical delivery pressure, so availability for industry and consumers has tightened simultaneously [2] [10].
3. Market structure and the “physical squeeze”
Reports from market participants describe a bifurcation between paper markets and the physical silver market: tight liquidity in London, high leasing rates, record deliveries and local premiums in places like China and the U.S. indicate stresses that aren’t visible in futures prices alone [2] [1] [3]. Policy moves could amplify that squeeze—proposed Chinese export restrictions on refined silver from January 1, 2026, would restrict many smaller refiners from exporting and concentrate supply control in state-approved entities, which, if enacted as described, would materially reduce readily available refined metal in global channels [4]. Likewise, large reported sovereign or national-scale buying (widely cited claims about India’s heavy purchases in 2025) are presented as major drains on available refined silver, though figures vary by source [5] [12].
4. Price signals and near-term availability implications
Prices surged massively through 2025—variously described as 120%–150% moves—and headline spot levels in early January 2026 clustered in the $70–$90/oz neighborhood depending on the feed, reflecting both scarcity and demand shifts [10] [3] [13] [14]. That price action itself has two availability implications: it makes marginal supply sources and recycling more economic, but it also encourages end-users to seek physical delivery and hoard, reinforcing local shortages and delivery bottlenecks [2] [1].
5. Off-ramps: what could relieve tightness and why uncertainty remains
Analysts offer competing paths off the current squeeze: some forecast higher-for-longer prices as deficits persist and industrial adoption grows, with forecasts ranging widely and some bullish scenarios pushing toward triple-digit prices in stressed cases [10] [11] [7]. Others expect production conditions to gradually improve—either through higher mining investment, by-product recovery, increased recycling or a slowdown in some physical investment flows—which could moderate tightness in the medium term [6] [7]. Importantly, many sources warn that even if average price forecasts moderate, liquidity and delivery frictions can persist, meaning availability at retail or factory levels could remain uneven [2] [3].
6. Bottom line: availability is tight now, structurally constrained but not immutable
Current reporting converges on a clear reality: physical silver availability is materially tighter than normal because multi-year deficits, concentrated reserves, rising industrial demand and market structure problems have combined to create localized shortages and delivery stress [1] [9] [4]. However, whether that tightness becomes permanent depends on a mix of policy (export controls), real-economy demand trends (solar, AI infrastructure), and the pace at which higher prices translate into more refined supply and recycling—areas where sources diverge and where medium-term improvement remains plausible but far from guaranteed [6] [10] [7].