Deutsche Bank forecasts silver surplus by 2027 amid falling demand
Deutsche Bank has forecasted a shift from silver shortage to surplus by 2027, driven by rising inventories and declining industrial demand. Analyst Daniel Ghali predicts average silver prices will drop to around $70 per ounce in the second quarter of 2027, following a spike to $120 per ounce at the start of 2026. The bank notes that London vaults currently hold over 914 million ounces of silver, with more than 300 million ounces freely available, a 70% increase since October 2025.
Key factors contributing to the anticipated surplus include a significant drop in solar-sector silver consumption, expected to fall over 20% this year, and a 17% reduction in per-cell usage in 2026. The solar industry's shift to thinner busbars, copper-coated silver pastes, and more efficient cell designs has lowered silver's share of solar module manufacturing costs from over 30% early in 2026 to around 14%, though this remains high enough to encourage further substitution.
Deutsche Bank also anticipates that silver-backed investment funds could offload up to 40 million ounces by December 2027, mirroring past Federal Reserve policy cycles. Additionally, India's silver imports are currently 25% below previous year levels due to higher duties and purchase restrictions, while China's onshore price premiums despite rising inventories pose an upside risk to the surplus scenario.
The bank's outlook aligns with its recent downward revision of gold targets in June 2026, signaling a more conservative view across precious metals. The sharp decline in solar-related silver consumption, particularly in China, suggests that new primary silver projects in solar-dependent regions will need robust by-product credits or diversified offtake agreements to secure investment.