Silver on Track for Fifth Consecutive Deficit
Rise in mine supply and slight fall in demand expected in 2025
Global silver demand exceeded supply for a fourth consecutive year in 2024, according to the World Silver Survey 2025, released on Thursday.
The supply/demand imbalance resulted in a structural market deficit of 148.9 million ounces for 2024, according to the survey, which was released by the Silver Institute and Metals Focus.
It took the combined deficit from 2021-24 to 678Moz, equivalent to 10 months of global mine supply in 2024.
Total silver demand dropped 3% in 2024 to 1.16 billion ounces, mainly driven by weakness in physical investment and slightly lower silverware and photographic demand.
Silver industrial demand rose 4% last year to a new record high of 680.5Moz due to strong electronics and electrical demand.
“This reflected structural gains in the green economy flowing through from the photovoltaic and automotive sectors and grid infrastructure development,” the survey said.
“Demand also received a boost from artificial intelligence-related applications. While thrifting and substitution remained limited across most sectors, notable advancements within the PV segment led to a sharp reduction in silver loadings.”
Baker Steel Capital Managers recently described silver as the “unsung hero” of the new industrial revolution and said its use in technology was often overlooked.
Coin and net bar demand fell 22% to a five-year low of 190.9Moz last year, led by double-digit declines across all major Western markets, including a 46% slump in the US.
Silver mine production in 2024 rose by 0.9% to 819.7Moz.
Driving the gains was increased output from lead-zinc mines in Australia and the recovery of supply from Mexico, as Newmont Corporation’s (NYSE: NEM) Peñasquito mine returned to full production.
Mexico remained the leading silver producer, followed by China, Peru, Bolivia and Chile.
Silver production from gold mines jumped 12% to 13.9moz, a three-year high.
Silver recycling was up 6% last year to a 12-year high of 193.9Moz.
2025 outlook
The Silver Institute and Metals Focus expect silver demand this year to fall slightly to 1.15Boz.
Industrial fabrication is expected to be flat this year as the gains in silver’s use in PV offtake ease.
Jewellery and silverware demand are expected to weaken, though a modest recovery in coin and bar demand in some Western markets should largely mitigate losses.
Silver supply is forecast to rise by 1.5%, led by higher mine production.
“As a result, the silver market is anticipated to remain in a deficit, but this gap will be a four-year low of 117.6Moz,” the report said.
The survey warned that US tariffs could negatively impact silver demand this year.
There are concerns that an extended period of elevated tariffs, or a further escalation of global trade wars, could lead to significant supply chain disruptions and sharply lower global growth.
Physical investment could benefit from rising safe-haven purchases.
The gold price has continued to surge to almost daily record highs this month but silver has lagged.
The gold:silver ratio hit a five-year high of over 105.
After a 21% jump in price in 2024, the spot silver price rose to over US$34 an ounce last month. It was trading at more than US$32/oz this week.