Silver’s new floor: a 762-million-ounce deficit meets AI and solar demand

Last week Deutsche Bank argued that silver’s deficit could turn into a surplus as soon as 2027 — see Is the silver deficit story over?. This week the industry’s own body makes the other case. In an interview with Mining.com.au, Silver Institute chief executive Michael DiRienzo sets out why he thinks silver’s market floor has moved up.

The deficit math

As reported by Mining.com.au from the Silver Institute, 13 October 2026. Moz = million ounces.

A deficit means the world used more silver than mines and recycling supplied, with the gap filled from existing stocks. Five years of that adds up to roughly a full year of mine output drawn from inventories.

Why supply can’t simply respond

The point DiRienzo stresses is that only about 30% of silver comes from mines where silver is the main product. The other 70% is a by-product of mining copper, lead, zinc and gold. A higher silver price does little to change how much copper or zinc gets mined, so supply responds slowly to a shortage — which is why deficits can persist for years.

Solar thrifting vs AI and electrification

DiRienzo acknowledges the same trend Deutsche Bank highlighted: at high prices, solar manufacturers keep cutting the silver they use per panel. His argument is that other uses are absorbing the slack — data centres for AI, electric vehicles and cars in general, and wind and nuclear power. FXEmpire, citing the Silver Institute, adds power electronics to that list, puts 2026 industrial demand at 639.6 Moz, and calls this the sixth successive annual deficit.

The price backdrop

Silver hit a record of about $121 in January and has since, in DiRienzo’s words, “comfortably settled in the US$60s.” He adds: “Many people, including a lot of the banks, are projecting a year-end close of around US$80 an ounce.” That is their view, not ours — and it sits a long way above Deutsche Bank’s forecast of about $70 by the second quarter of 2027. The difference between the two is the debate in one line: whether thrifting and inventory rebuilding win out, or whether by-product supply and new industrial uses keep the market short.

For what is happening in China’s physical market right now, see China’s spot silver stays quiet. The gold-to-silver ratio tracks silver against gold.

Every figure here is as reported by the publications listed under Sources, at the time they reported it. Prices move; the live gold price has the current one. Nothing on this page is investment advice.