World Silver Institute: Global silver market to face supply shortage for sixth consecutive year

The World Silver Institute maintained its view in its annual outlook released Wednesday that the global silver market will experience a supply shortage for the sixth consecutive year. The report indicates that the supply gap is expected to widen by 15% to 46.3 million troy ounces in 2026. While demand for silver bars and coins is expected to grow by 18%, demand from industrial, photographic, jewelry, and silverware sectors is declining, potentially reducing total consumption by 2%. Supply is projected to decrease by 2%, primarily due to a slight decline in mining activity and reduced hedging, but this is partially offset by a 7% increase in recycling. The report states that while the Iran war casts a shadow over the short-term price outlook, it maintains a “constructive view” on silver for the remainder of 2026. The institute expects the Middle East conflict to be contained and that the tightening of monetary policy to curb energy inflation will be temporary. Even if the war continues, concerns about weak growth and fiscal strain could depress real bond yields, thereby boosting non-interest-bearing precious metals such as silver and gold. The report writes, “This, coupled with a recovery in safe-haven demand as cyclical market liquidations occur, should reignite interest in gold and silver.” (Jinshi)