Silver Market Records Fourth Consecutive Deficit as Industrial Demand Reaches New Heights
The silver market recorded its fourth consecutive structural deficit in 2024, with demand outpacing supply by 148.9 million ounces (Moz), according to the World Silver Survey 2025 published by the Silver Institute. This persistent imbalance has accumulated to a combined deficit of 678 Moz during 2021-2024, equivalent to 10 months of global mine supply in 2024.
Industrial demand has been the primary driver b
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Silver Market Records Fourth Consecutive Deficit as Industrial Demand Reaches New Heights
The silver market recorded its fourth consecutive structural deficit in 2024, with demand outpacing supply by 148.9 million ounces (Moz), according to the World Silver Survey 2025 published by the Silver Institute. This persistent imbalance has accumulated to a combined deficit of 678 Moz during 2021-2024, equivalent to 10 months of global mine supply in 2024.
Industrial demand has been the primary driver behind silver’s market strength, rising 4% in 2024 to reach a record 680.5 Moz. This unprecedented demand has been fueled primarily by applications in the green economy, including electric and telecommunications grid infrastructure, electric vehicles, charging stations, and photovoltaics. The growing influence of artificial intelligence has also stimulated demand in consumer electronics.
Regional trends show China leading global industrial demand with a 7% increase, while India registered a 4% rise. In contrast, European demand remained generally weak, with only isolated gains in the UK, and US demand decreased by 6%.
Silver prices have demonstrated significant volatility but overall strength. The metal saw a 21% intra-year increase in 2024, with an impressive 59% trough-to-peak rally. The annual price average rose by over a fifth to $28.27, its highest since 2012. Through the first quarter of 2025, silver prices climbed 18% to reach $34 an ounce amid rising geopolitical and economic uncertainties, before settling around $32.50 in early May.
Recent price pressure has been partly attributed to dollar strength, driven by yen weakness and Bank of Japan’s dovish stance. Despite this temporary pullback, market fundamentals remain supportive, with silver expected to record its fifth consecutive year of deficit in 2025.
On the supply side, global silver mine production increased marginally by less than 1% to 819.7 Moz in 2024. Mexico maintained its position as the leading silver producer, followed by China, Peru, Bolivia, and Chile. Secondary supply sources showed improvement, with recycling rising 6% to 193.9 Moz, primarily from industrial scrap and the processing of spent silver catalysts used in ethylene oxide production.
Major producers have reported strong operational results for early 2025. First Majestic Silver announced total production of 7.7 million silver equivalent ounces in the first quarter, including 3.7 million silver ounces. CEO Keith Neumeyer highlighted “an all-time record for silver production this quarter,” driven by the inclusion of 1.4 million ounces from their new Cerro Los Gatos asset and a 17% increase at San Dimas.
Similarly, Santacruz Silver ended 2024 with total silver production of 6.7 million ounces from its operations in Bolivia and Mexico. Executive Chairman and CEO Arturo Préstamo noted that “growth in silver output and favorable market dynamics in silver prices have significantly strengthened our revenue-generating ability.”
Beyond traditional applications, silver continues to find new industrial uses. Researchers at Tulane University are exploring silver and nickel as potential catalysts for producing ethylene oxide without toxic chemicals, offering the dual benefits of reducing carbon dioxide emissions and cutting production costs.
In agriculture, silver nanoparticles are being studied for their antimicrobial properties in preventing mold in tomato plants. Healthcare applications are also expanding, with Indian scientists developing a silver wire network on stretchable material that can detect strain and pain, potentially helping doctors identify stress and pain before it becomes chronic.
Junior mining companies are advancing promising silver projects. Cerro de Pasco Resources recently announced impressive drill results from its tailings project in Peru, confirming high-grade intersections of silver along with zinc, lead, copper, gold, and significant concentrations of gallium. Meanwhile, Vizsla Silver is progressing with its flagship Panuco project and has updated its at-the-market equity program to offer up to US$200 million of common shares.
Looking ahead, total silver demand in 2025 is projected to decrease slightly to 1.15 billion ounces, with industrial demand remaining flat but coin and bar demand in Western markets expected to see modest recovery. Total supply is forecast to increase by 1.5%, led by higher mine production, yet the market is still anticipated to remain in deficit.
The persistent structural imbalance in the silver market, combined with its crucial role in the green energy transition and expanding industrial applications, presents a compelling investment case. As both a precious metal with monetary value and an industrial metal with growing technological importance, silver offers unique exposure to multiple economic trends while providing portfolio diversification for investors.
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