Silver Institute Sees 46.3 Million-Ounce Market Deficit in 2026
Key Facts
A Silver Institute survey prepared by Metals Focus forecast the global market deficit widening to 46.3 million ounces in 2026, compared with a deficit of 40.3 million ounces in 2025. Reuters published the estimates on April 15, 2026. The forecast implies a sixth consecutive annual deficit, with the estimated gap increasing between the two years. Reuters said the cumulative draw on inventories adds to the risk of tight liquidity in the silver market. The estimates come as demand components diverge, with industrial manufacturing expected to weaken while physical investment remains strong.
The April estimate lowered the outlook for industrial silver fabrication by 3% to a four-year low. By contrast, the survey forecast an 18% increase in demand for coins and bars during 2026. The divergence reflects different demand paths by use, as industrial fabrication contracts while investment demand for physical metal advances. A Reuters report said weaker demand forecasts had not prevented the projected market deficit from widening. Continued inventory drawdowns also keep metal availability and liquidity in focus for market participants.
According to Reuters, the market has drawn 762 million ounces from inventories since 2021, amid a structural deficit that has persisted since that year. The agency warned that this depletion raises the possibility of renewed liquidity stress, even with weaker demand expectations. The cumulative drawdown places the 2026 deficit estimate within a broader trend of declining inventories, rather than in isolation from the market balance in a single year. The coverage links the continued drawdown to the market's sensitivity to any renewed tightening in available supply. This is happening alongside diverging trends in industrial demand and demand for coins and bars.
On prices, the World Bank said silver jumped 55% in the first quarter of 2026 from the previous quarter, after reaching record levels in January, before falling sharply in March amid historically high volatility. The bank attributed a major part of the moves to a sharp rise in speculative demand followed by profit-taking. It said expectations of tight supply and dollar volatility also formed part of the market backdrop. These moves provide context for forecasts of weakness in some industrial uses, jewelry and silverware as prices rise. But the bank said strength in retail investment could partly offset that weakness.
The World Bank said retail investment, including coins, bars and exchange-traded funds, is expected to offset weakness in demand for jewelry, silverware and some industrial uses. It added that mine production and recycling would not be enough to meet demand. This assessment puts supply and demand components at the center of the persistent deficit, as new supply does not fully offset expected strength in some categories. This picture differs from industrial fabrication alone, which the April survey forecast would fall by 3% to a four-year low. For coins and bars, the survey forecast growth of 18% in 2026.
In its price forecasts, the World Bank projected that the average silver price in 2026 would be 76% higher than the 2025 average, before falling by about 7% in 2027. The bank linked its forecast to the continuing deficit and reliance on above-ground inventories. It also warned that renewed global trade tensions or financial-market volatility could attract additional flows into gold and silver as safe havens. It said those flows could push prices above its forecasts. These scenarios remain part of the bank's assessment of what could happen in 2027, while the widening of the deficit to 46.3 million ounces remains the Silver Institute survey's forecast for 2026.