Silver's Supply Deficit Worsens, Fueling Potential Price Rally

Silver's supply deficit has been growing for years, with the 2026 shortfall projected at 46.3 million ounces, wider than the 40.3 million-ounce deficit in 2025.

The cumulative silver drawdown from above-ground stocks since 2021 is estimated to be around 762 million ounces.

Meanwhile, global mine production has remained flat since 2015 at around 830-850 million ounces per year.

Silver's supply issues are compounded by its use in solar panels, which is forecast to fall by 19% in 2026 due to 'thrifting', using less silver per cell.

However, Monarch PMS argues that this decline is not a substitution for other metals, but rather a practical limit on how much silver can be reduced without affecting cell efficiency and reliability.

The market structure of COMEX registered inventories standing at around 96 million ounces with only 17.8% coverage against outstanding paper claims and estimated paper leverage of around 5.6x is another factor contributing to the potential for an upside move in silver prices.