Posted on 09/17/2025 9:56:51 PM PDT by delta7
Understanding the Silver Supply-Demand Deficit: A Market in Transition
The global silver market has undergone a remarkable transformation in recent years, shifting from a position of consistent surpluses to a persistent structural deficit. This fundamental change in market dynamics represents one of the most significant developments in the precious metals sector, with implications for investors, industrial consumers, and mining companies alike.
The Emergence of a Structural Silver Deficit
For nearly half a decade, silver demand has consistently outpaced available supply, creating a sustained market imbalance. This deficit began in 2021 when consumption suddenly exceeded production by approximately 75.3 million ounces – a dramatic reversal from the surplus conditions that characterized the previous five years.
Unlike temporary market imbalances driven by short-term factors, the current silver supply and demand deficit appears structural in nature, reflecting deeper changes in both consumption patterns and supply constraints. Market analysts project this deficit will persist at least through 2025, potentially draining nearly 800 million ounces from above-ground inventories over a five-year period.
What we're witnessing isn't a cyclical fluctuation but rather a fundamental realignment of silver market dynamics. The combination of accelerating industrial demand and constrained primary production creates conditions for a multi-year deficit that will require significant price discovery to resolve." – Industry analyst quoted in Silver Survey 2022
Key Factors Behind the Silver Deficit
Several interrelated factors are driving this persistent market imbalance:
Surging industrial demand – particularly in renewable energy, electronics, and automotive sectors Constrained mine production – limited by development timelines and capital requirements Insufficient recycling volumes – unable to offset the growing gap between primary supply and consumption Consistent investment demand – creating additional pressure on available supplies This convergence of demand growth and supply limitations has fundamentally altered market dynamics, potentially setting the stage for significant price discovery in coming years.
How Did the Silver Market Transform from Surplus to Deficit?
The Era of Market Surpluses (2016-2020)
Between 2016 and 2020, the silver market operated with consistent annual surpluses, where total supply comfortably exceeded demand. During this period, surpluses ranged from a modest 9.8 million ounces in 2016 to a substantial 64.1 million ounces at their peak.
This surplus era was characterized by:
Relatively stable industrial consumption Adequate mining output Balanced investment interest Sufficient recycling contribution The market's ability to maintain these surpluses created an environment of price stability, with silver trading predominantly in the $15-20 per ounce range throughout most of this period.
The Pivotal Reversal (2021)
The year 2021 marked a decisive turning point in silver market fundamentals. After five consecutive years of surpluses, the market suddenly swung to a deficit of 75.3 million ounces – representing one of the most dramatic year-over-year changes in recent market history.
This abrupt shift occurred as industrial demand accelerated sharply while mine production struggled to respond. The deficit's emergence coincided with the post-pandemic economic recovery, suggesting industrial consumption was a key driver rather than investment speculation.….
“...the most undervalued asset on the planet”
Platinum is still cheap (relatively, for the present time, not the past), and still is needed by industry.
https://gogold.co.nz/shop/?filter_metal=silver
From the numbers, it looks like the consumption for photovoltaics market just about matches the production deficit. If that is true, then if the subsidies go away so would the deficit and the price would stabilize.
Thoughts?
“Hi Ho Silver,”
+ 46% ytd
and away ....
Toto ... we are not in Kansas any more.
A lot of words to say there is not enough silver sauce gonna cost you more .
A lot of words to say there is not enough silver so it is going to cost you more.
Yes, and still waiting for the big payday for silver...waiting.
Every silver has a cloud lining.
Silver is not rare, scarce, or in limited supply. It’s a controlled manipulated market.
Most currencies have been devalued. That’s why it takes more paper to get it.
Aluminum was once seen as such a miracle metal that the Washington Monument has an aluminum cap.
In the US, folks now regularly throw away aluminum foil used to wrap a sandwich.
I use this site:
Silver Price Performance USD
Change Amount %
Today -0.84 -1.97%
30 Days +4.80 +12.70%
6 Months +9.02 +26.89%
1 Year +11.80 +38.33%
5 Year +17.82 +72.01%
20 Years +35.23 +479.76%
Those closely watching the Mining sector see the four year long mining deficit. Above ground supplies are rapidly being depleted, big money is taking huge deliveries from the Comex and LBMA.
A few closely watching the LBMA inventories state at the current rate of deliveries, the LBMA goes dry in five months….possibly two to three months if deliveries ( people taking the physical possession) uptick.
“Investor buys $ 2.8 billion in silver for fear of ‘great reset’ and says that Bitcoin will lose value
https://thenationview.com/cryptocurrency/242083.html
“David Batemanformer President of Entrata, claims to have bought r $ 2.8 billion in silver In the past six months. Predict a collapse in the global monetary system, called ‘The Great Reset’He points out Gold and silver will be the “only lifeboats”.
…….the good book of wisdom mentions much about “ equal weights and measures “. Electrons on a screen and paper is not what our Creator had in mind for “ money”.
I’m still stacking.
Silver is being used in more industries than ever. Silver has been money since civilization.
Silver has slowly gone up $10 since Jan. Now around $42 an ounce. I am still stacking.
Great article.
From the numbers, it looks like the consumption for photovoltaics market just about matches the production deficit. If that is true, then if the subsidies go away so would the deficit and the price would stabilize.
Thoughts?
——————
Two Central Banks are now buying Silver in addition to Gold. Central Banks are the largest money in the world. I am looking forward to $300 t/oz Silver as this generational PM Bull market continues ( it is two years into the historic cycle).
China, Russia and Indian are now remonetizing PM’s as ALL paper currencies are crashing. Paper is for spending, PM’s are for storing Wealth.
Gold Price Performance: % Annual Change
Year USD AUD CAD CHF CNY EUR GBP INR JPY
2010 +29.5% +13.5% +22.3% +16.7% +24.9% +38.8% +34.3% +23.7% +13.0%
2011 +10.1% +10.2% +13.5% +11.2% +5.9% +14.2% +10.5% +31.1% +4.5%
2012 +7.0% +5.4% +4.3% +4.2% +6.2% +4.9% +2.2% +10.3% +20.7%
2013 -28.3% -16.2% -23.0% -30.1% -30.2% -31.2% -29.4% -18.7% -12.8%
2014 -1.5% +7.7% +7.9% +9.9% +1.2% +12.1% +5.0% +0.8% +12.3%
2015 -10.4% +0.4% +7.5% -9.9% -6.2% -0.3% -5.2% -5.9% -10.1%
2016 +9.1% +10.5% +5.9% +10.8% +16.8% +12.4% +30.2% +11.9% +5.8%
2017 +13.6% +4.6% +6.0% +8.1% +6.4% -1.0% +3.2% +6.4% +8.9%
2018 -2.1% +8.5% +6.3% -1.2% +3.5% +2.7% +3.8% +6.6% -4.7%
2019 +18.9% +19.3% +13.0% +17.1% +20.3% +22.7% +14.2% +21.6% +17.7%
2020 +24.6% +13.6% +22.2% +14.0% +16.9% +14.4% +20.9% +27.9% +18.5%
2021 -3.5% +2.2% -4.1% -2.0% -6.1% +2.9% -2.5% -1.6% +7.5%
2022 -0.3% +6.5% +6.9% +1.0% +8.3% +6.0% +11.8% +10.7% +13.4%
2023 +12.8% +12.6% +9.9% +2.4% +15.7% +8.7% +6.6% +13.4% +21.6%
2024 +26.3% +38.3% +37.1% +35.9% +30.3% +34.2% +28.2% +29.8% +40.9%
2025 +42.3% +33.7% +37.4% +24.7% +39.1% +25.5% +32.4%
The numbers don’t lie.The world Gold price isn’t going “ up”, the world’s paper currencies are going DOWN in purchasing power. It is taking much more paper to buy an ounce.
When PMs are seen as means of increasing wealth, the resulting instability degrades their "unit of account" function which degrades their "medium of exchange" function.
One cannot buy groceries with silver bars.
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