A new report from Metal Focus reveals that global silver market remains structurally tight, with elevated prices, a fifth consecutive annual supply deficit in 2025, and ongoing mine and recycling constraints despite modest production growth. At the same time, PV-driven silver demand is falling sharply due to cost pressure and thrifting.
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From pv magazine Global
The global silver market remains structurally tight despite weakening demand from the photovoltaic sector, with elevated prices and constrained supply continuing to shape the PV manufacturing landscape.
According to the latest World Silver Survey 2026 by independent research consultancy Metals Focus, silver prices rose sharply through 2025, averaging just over $40 per ounce, a 42% year-on-year increase, before climbing to even higher levels in early 2026. The rally was driven by a combination of strong investment demand, tightening physical supply, and ongoing geopolitical and macroeconomic uncertainty.
At the same time, the solar sector, long a key driver of industrial silver demand, is entering a period of adjustment. Silver demand from PV producers declined by 6% in 2025 to 186.6 million ounces and is now forecast to fall by a further 19% in 2026 to around 151 million ounces.
“Industrial offtake slipped by 3% to 657.4 million ounces, marking the first post-pandemic decline, as a contraction in PV demand and thrifting elsewhere outweighed gains linked to AI-related data-centers, high-speed transmission hardware, EV penetration and charging infrastructure,” the report reads.
The decline in PV-related silver consumption reflects a combination of technological change and cost pressure. As silver prices increased, module manufacturers accelerated efforts to reduce silver loadings per cell by adopting thrifting strategies and alternative metallization approaches.
The analysts explained that intense competition and rising raw material costs have pushed producers to cut silver usage, even as global solar installations continue to grow, noting that this growing decoupling between PV capacity expansion and silver demand marks a significant shift for the industry.
On the supply side, global silver mine production rose significantly last year, supported by mining project ramp-ups in Latin America. Recycling also increased modestly, reaching a 13-year high of 197.6 million ounces.
Despite these positive results, the silver sector recorded its fifth consecutive annual deficit in 2025, totaling 40.3 million ounces, with another shortfall expected in 2026. Structural constraints, including declining ore grades, operational disruptions, and a limited pipeline of new projects, are expected to continue limiting supply growth. Recycling volumes are rising but remain constrained by refinery bottlenecks and capacity challenges.
The report also reveals that, while PV demand weakened, other segments such as AI-driven data centers, electric vehicles, and power infrastructure continued to support consumption.
Looking ahead, total industrial demand is expected to decline again in 2026, with further weakness in PV outweighing gains in emerging applications. Silver, however, is expected to remain a strategic material risk for PV manufacturers, even as technological innovation continues to reduce dependence on the metal.
According to recent analysis by the Silver Institute, the photovoltaic industry is expected to use less silver in 2026. Silver paste currenly accounts for around 10-20% of total solar cell costs, creating a difficult environment for manufacturers already facing overcapacity, falling module prices and squeezed margins.
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