# Silver Structural Supply Deficit Silver has been in supply deficit for five consecutive years (2021-2025). The cumulative shortfall is nearly 820 million ounces. ## The Numbers 2025 deficit: Demand 1.24 billion oz, Supply 1.01 billion oz (mine production + recycling), Deficit 230 million oz. Five-year cumulative (2021-2025): Total deficit 820 million oz, Average annual deficit 164 million oz. The Silver Institute forecasts ongoing deficits through 2026, with 2025's shortfall at approximately 117 million ounces. ## Where the Deficit Comes From Supply cannot keep up because [[Byproduct Silver Problem|71% of silver is byproduct]] from copper, zinc, lead mines. Even if silver doubles, byproduct supply doesn't respond. Primary silver mines: Only 29%, slow to develop. Recycling: Already elevated at ~175M oz/year. Demand keeps accelerating: [[Silver in Solar Panels|Solar panels]] 200M oz/year and growing, [[Silver Industrial Demand|electronics]] 240M oz/year, EVs 60M oz/year, AI/data centers (new structural demand), [[Silver Investment Demand]] 190M oz/year. ## How the Deficit Is Filled You cannot run 230M oz annual deficit forever. Gap filled by COMEX warehouse drawdowns (~300M oz total), LBMA vault drawdowns (~900M oz total), ETF redemptions (~600M oz total). Math: 1,800M oz total inventory ÷ 230M oz/year = 7.8 years. But realistic available: 400-500M oz = 1.7-2.2 years at current deficit rate. ## Why This Is Structural Cyclical deficit: Temporary demand spike or supply disruption, prices rise then rebalance in 1-2 years. Structural deficit: Five consecutive years and continuing, demand driven by irreversible technology trends (solar, EVs, AI), supply constrained by byproduct nature and long development times, getting worse not better. ## The Inventory Depletion Clock At 230M oz/year deficit: Year 1 (2025) total inventory 1,800M oz. Year 2 (2026) total inventory 1,570M oz. Year 3 (2027) total inventory 1,340M oz. Critical threshold: 2027-2028 when available inventory hits 800-900M oz. That's when markets realize the cupboard is nearly bare. ## Why [[China Silver Export Restrictions 2026]] Makes It Worse Without restrictions: 230M oz deficit, filled by inventory drawdowns, manageable for 2-3 years. With restrictions: 230M oz deficit PLUS 500-585M oz of refining capacity removed from market. Effective shortage: 730-815M oz/year. Inventory depleted in <1 year. The export restrictions turned a manageable structural deficit into an immediate crisis. Links: [[Silver MOC]] | [[Why Silver Supply Cannot Respond to Price]] | [[Silver Refining Chokepoint]] --- #silver #economics #systems