Lower silver demand and higher supply to reduce global deficit by 21% in 2025

ReutersApr 16, 2025 12:15 PM

Silver faces fifth year of structural market deficit
Total demand seen down 1% in 2025 after 3% fall in 2024
Industrial demand reached a record high in 2024
Mine supply seen rising 2% in 2025

LONDON, April 16 (Reuters) - The global silver deficit is expected to narrow by 21% to 117.6 million troy ounces in 2025 due to a 1% fall in demand and a 2% increase in total supply, the Silver Institute industry association said in a report on Wednesday.

Silver, which is used in jewellery, electronics, electric vehicles and solar panels, as well as an investment, faces the fifth year of a structural market deficit.

Total industrial demand for silver is expected to be steady in 2025 after reaching a record high of 680.5 million ounces in 2024, while jewellery and silverware demand will fall, according to the annual report, produced for the Silver Institute by consultancy Metals Focus.

Demand for silver coins and bars will rise 7% this year after falling by 22% in 2024 to a five-year low of 190.9 million ounces due to major declines across all Western markets.

The steepest drop of 46% in this category happened in the United States due to profit-taking at higher prices, market saturation, and investors' reaction to Donald Trump's win in the U.S. presidential election in November, the association said.

Spot silver prices XAG= are up 12% so far this year after rising 21.5% in 2024. They are supported by the gold price rally, driven mainly by uncertainty brought by Trump's tariffs, which boosted gold's safe-haven appeal.

"The impact of U.S. tariffs will be a key risk to silver demand this year," the report said.

Due to silver's dual role as a precious and industrial metal, its investment demand has faced conflicting forces so far in 2025. While recessionary fears and geopolitical tensions support portfolio diversification, a weakening global economic outlook worsens industrial demand prospects, the association said.

Industrial, jewellery, and silverware demand will come under further pressure in case of an extended period of elevated tariffs, or a further escalation of global trade wars disrupting global supply chains and affecting global economic growth, it added.

SILVER SUPPLY & DEMAND (million troy ounces)

	2023	2024	2025F	24/23 change	25/24 change
SUPPLY
Mine production	812.7	819.7	835.0	1%	2%
Recycling	183.5	193.9	193.2	6%	0%
Net Hedging Supply	0	0	0.9
Net official sector sales	1.6	1.5	1.5	-9%	4%
Total supply	997.8	1,015.1	1,030.6	2%	2%

DEMAND
Total industrial:	657.1	680.5	677.4	4%	0%
- electrical/electronics	444.4	460.5	465.6	4%	1%
…of which photovoltaics	192.7	197.6	195.7	3%	-1%
- brazing alloys	50.2	51.6	52.9	3%	3%
- other industrial	162.6	168.4	158.9	4%	-6%
Photography	27.3	25.5	24.2	-7%	-5%
Jewellery	203.1	208.7	196.2	3%	-6%
Silverware	55.1	54.2	46.0	-2%	-15%
Coin/net bar demand	244.3	190.9	204.4	-22%	7%
Net hedging demand	11.5	4.3	0	-62%
Total demand	1,198.5	1,164.1	1,148.3	-3%	-1%

Market balance	-200.6	-148.9	-117.6	-26%	-21%
ETPs	-37.6	61.6	70.0	n/a	14%
Market balance less ETPs	-163.0	-210.5	-187.6	29%	-11%
Average price $/oz	23.35	28.27		21%

*Source: Metals Focus for the Silver Institute

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