Over the last year or so I have sent out many a missive on silver -- and the Silver Institute, but I have yet to put it all together in a comprehensive supply and demand balance sheet, and then compare my balance sheet to the one put out by the Silver Institute; so here we go.
Over the years there have been many changes in methodology in their reports; some years photography is included in industry, in others it is not. Solar only became a line item in 2010, for several years before that it was not itemised. I have been very careful to make sure that I am always comparing apples to apples.
Sorry for the length of this essay, but the more apples I turned over, the more rotten ones I found, barrels of them.
Two years ago I had never heard of the Silver Institute, but I am an old hand at putting together balance sheets in commodities. I can honestly say that I have never seen anything like the consistently shoddy lop sided work as that of the Silver Institute.
For decades I was a permanent thorn in the side of the USDA on account of their clearly biased data, but the differences I had with the USDA were minuscule compared to the glaring and accelerating inconsistencies strewn throughout the Silver Institute reports, year after year.
In my calculations silver demand in photography is excluded. In that way the massive collapse in photographic silver demand over the last few decades does not obscure the real demand for silver from other sources.
If anyone tries to defend the Silver Institute's data, bounce the following off them.
In their 2020 annual survey, which covered the years 2011 to 2020, the Silver Institute took a giant axe to global silver demand.
Industrial demand for the year 2011 was reduced from 653 million ounces in the 2019 report, to 508 million in the 2020 report, a drop of 145 million ounces. For the year 2012, industrial demand was reduced from 600 million ounces to 450 million, a drop of 150 million. In total, over the previous 10 years, cumulative industrial demand was reduced by 1.1 billion ounces. The drop in jewelry was 154 million ounces, and in silverware, the reduction was 26 million ounces.
In other words, total physical demand was reduced by 1.3 billion ounces from the 2019 report to the 2020 report, an average of 130 million ounces per year, or 15.3 %. A reduction of 1.3 billion ounces is almost two full years on mine supply.
The 2019 report was not an outlier, it was very much in line with previous reports going back to 2015. But then, in 2020 somebody decided to get out the axe.
There has never been one word of explanation as to why this retroactive collapse in demand took place from one year to the next. When I saw what they did in 2020, the Silver Institute were totally discredited in my eyes. I have never understood how their data is fully accepted and endlessly regurgitated by the entire industry, year after year. How blind can that industry be?
Inevitably, when you mess around with the numbers on such a grand scale, some strange looking stuff will show up, so I went looking through 30 years of annual reports. What I found is that the data gets consistently worse over time.
In the 2019 report, Industrial demand for silver excluding solar and photography for the year 2011 was 525 million ounces.
Incredibly, in their 2026 report the Silver Institute estimates industrial demand today, excluding solar and photography, at only 466 million ounces, down 59 million ounces, or 11%, during a time when the world switched from analog to digital, when demand for electronics was exploding, and when global GDP rose by more than 90%. Are we to believe that there is a 15 year inverse relationship between global population growth and prosperity on one hand, and silver demand on the other?
Given the huge increase in silver use in smartphones, computers, 5G towers, robotics, wind turbines, electric vehicles, drones, missiles, household electronics, touch-tone screens, etc, since 2011, I cannot believe that silver demand during this transformative period for the world of electronics had grown by any less than 2.5% per year. A compounded growth rate of 2.5% per annum would put industrial silver demand today at 760 million ounces, excluding solar and photography. That is 294 million ounces above the Silver Institute's current estimates.
Here is something else that does not make any sense.
In 1990 for every trillion dollars of global GDP, industrial silver demand was 11.5 million ounces. In 2000 that ratio was 11.1 million ounces. However, in 2026 industrial silver demand dropped to 5.0 million ounces for every trillion dollars of GDP, down over 56% from where it was in 1990 and 2020.
Had the ratio remained as it had been in those years, industrial silver demand today would be 1.05 billion ounces, not 466 million ounces, a difference of 584 million ounces.
Here is another puzzler.
- Since 1990 copper demand has increased by 300%.
- Nickel demand is up 430%
- Aluminium demand is up by 400%.
However, according to the Silver Institute, in 1990 industrial silver demand excluding photography (there was no solar) was 278 million ounces. They now estimate it at 489 million ounces, which is up just 75%.
That is an inexplicably far cry from the 300% plus increases in the other metals.
Had the growth in industrial silver demand equaled that of copper, it would now be 834 million ounces, not 466, a difference of 368 million ounces, which is approaching half the current annual mine supply.
The diverging demand paths between copper and silver keep on widening. From 2022 to 2025, copper demand is up 9.5%. Silver demand excluding solar is down 1%. If silver demand had followed copper demand from 2022 to 2025, it would have been 55 million ounces higher by 2025. An increase of 55 million ounces over 4 years may not appear to be a game changer, but the power of compounding is amazing. The ability of the Silver Institute to compound errors without anybody noticing is also amazing, especially when those errors have been compounding for well over 10 years.
The International Copper Study Group predicts that because of electrification, digitalization, and technologies such as AI, data centers and electric vehicles, copper demand is expected to rise by 48% from 2025 to 2040.
Do any of those industries ring any sort of bells?
No wonder the apparent silver demand is diverging wildly from copper, as the equivalent increase from 2025 in industrial silver demand excluding solar would be 700 million ounces if you use the Silver Institute data for 2025, and more than 1.2 billion ounces if you use my data. There is zero chance that silver mines will be able to keep up with a demand pull in that range.
In 2004, demand for brazing and alloys, which are largely used in refrigeration and air conditioning was 49 million ounces. With the earth heating up, and its population increasing by 1 billion people, it was no surprise that demand in that sector shot up to 67 million ounces by 2014.
However, the Silver Institute estimates current demand is only 51 million ounces, almost back to where it was 22 years ago in 2004. For the last 12 years silver demand in this sector has been stuck in reverse gear.
The pattern should now be clear; sometime over the last 10 to 15 years, nothing but bad stuff happens to silver demand across the board, like a disease approaching the terminal stage.
Here is a prime example.
In 2014 global silver jewelry demand was 227 million ounces. Currently the Silver Institute estimates it at 159 million ounces, down 30%. You might think that this is because of the recent increase in silver prices. However in 2023, with the price exactly where it was in 2014, they had already reduced demand to 183 million ounces, down 19% in 9 years.
Almost half of global silver jewelry demand comes from India. I have been to India many times and can vouch for the love affair that Indians have for the shiny metal.
If jewelry demand in the rest of the world had remained unchanged since 2014, and if India's demand had kept pace with their economic growth, 2026 global jewelry demand would be 350 million ounces, not 159 million, a difference of 191 million ounces.
Indians import 700 to 900 tons of gold each year, of which around 550 tonnes is for jewelry. That is roughly 18 million ounces of gold.
With the silver gold ratio at 65, the equivalent amount spent on silver jewelry would equate to 1.1 billion ounces.
In the parts of rural India that I have frequently visited, virtually all the women wear silver jewelry. It is rare to see a piece of gold jewelry, except for very small items like nose rings. The silver jewelry is often in the form of massive bracelets, from wrist to elbow, necklaces and anklets.
If Indians were to spend just one quarter of the amount of money on silver jewelry as they do on gold jewelry, their silver jewelry purchases would be 290 million ounces, which is 131 million ounces more than what the Silver Institute currently estimates for the entire world.
Just as with industrial demand, a bit of history and common sense says that jewelry demand is massively underestimated.
It is obvious that purchases of silverware have fallen off over the decades; candlesticks, photo frames, silver cutlery, and a general downsizing towards condos from a Downton Abbey lifestyle, but the Silver Institute cut silverware demand by half over the last 8 years alone, from 67 million ounces, to only 33 million ounces.
Once more, a huge and unprecedented collapse in demand has taken place over the last ten years.
In 2010 the Silver Institute estimated silver usage in solar power generation at 51 million ounces, and in 2026 at 151 million ounces, up threefold in 16 years.
According to ourworldindata.org, installed capacity in 2010 was 12.5 GW, and in 2025 it was 636 GW, up 50 times. Had nothing changed in solar technology, and if silver incorporation in solar panels had remained the same, silver consumption in solar panels would be 2.55 billion ounces. However in 2010 Perc panels were dominant. Today TOPCon panels have around 80% of market share. They are 10 to 15% more efficient than Perc at converting the sun's energy, but use roughly 40% more silver.
Consequently, had there been no "thrifting", the Silver Institute's favourite word to explain away the giant gap between silver input and GW output, and taking into account the industry's move towards TOPCon, solar demand would now consume around 3 billion ounces. Clearly, there are ongoing efficiencies in every technology including solar, but had the 10% thrifting occurred each and every year since 2010, and if the TOPCon technology had not taken over, solar's demand for silver would now be 550 million ounces, not 151. To get to 151 million ounces, thrifting in the order of 17% each year for 16 consecutive years, without missing a heartbeat, would be required.
The argument I have heard is that in 2010, the solar industry was slathering on way too much silver in solar panels than was warranted. Sort of like a bunch of 9 year olds at a paintball party.
So I decided to use 2022 as a more recent starting point in a now mature industry. Since 2022 solar capacity has risen from 280 GW to 636 GW, an increase of 227%. The Silver Institute claims that silver incorporation in solar panels is up only 28% since 2022, from 118 to 151 million ounces.
A 28% increase in silver use compared to a 227% increase in power generation suggests thrifting to the tune of 40% for each of the 4 years at the same time that the TOPCon panels gained ascendancy. That is not thrifting, that is wholesale slaughter of demand, the kind of demand destruction that might happen in a modern day replay of the bubonic plague outbreak with the fleas pumped up on steroids.
Common sense and basic math says that solar demand for silver today must be 400 million ounces, at a bare minimum. Even that number implies an enormous amount of thrifting.
The U.N. Secretary General recently said that the only effective response to the climate crisis is by accelerating the shift to renewables. Many of the renewable associations like IRENA and Ember are calling for a tripling of global installed solar, from 2.8TW to 8 TW by 2030.
In March of this year 50 countries had all time record high solar panel imports. China is building the Great Solar Wall in Mongolia, all 300 by 2.5 miles of it. Musk is constructing two solar panel manufacturing plants near Houston that will produce 100GW of annual solar capacity each year.
Contrary to what some of the major banks are saying, solar energy installations are not about to slow down, and as of now, nothing transfers the sun's energy into GWs better than silver. Yet the Silver Institute has reduced estimated solar demand by 19% from 2025 to 2026.
In a previous e-mail I stated that the USGS estimated that 64 % of U.S. silver imports were consumed in U.S. data centers. What they actually said was this;
"...here are the key minerals in data centers, and the percentage the U.S. imports to meet consumption of those minerals; silver, 64%." In other words they are saying that 64% of silver consumed in the U.S. is imported, and that silver is used in data centers, which is a totally useless comment as everyone knows that silver is used in data centers. The question is, how much?
Several months ago someone involved in the data center construction industry claimed that the amount of silver used in the building of the giant hyperscaler Stargate in Abilene, Texas was 22 million ounces. I questioned that number, thinking the 22 million would be for the entire Stargate project, not just one hyperscaler, but I was told that it was for the 4 million square foot complex in Abilene alone.
The problem with these gargantuan hyperscalers is the enormous amount of heat that the throw off. By literally allowing the electrons to travel more smoothly, large quantities of silver are indispensable in the construction of these behemoths. Just one planned hyperscaler in Utah would consume 250% of that state's current electricity output.
There are around 3,000 data centers planned or currently under construction in the U.S. alone, which is more than 50% greater than what has already been built, if each center consumed 50,000 ounces of silver , that would equate to 150 million ounces. Double that number for global data center demand.
Capital expenditure in data centers is up 420% since 2022. Given the critical part that silver plays in data centers, especially given its supreme connectivity and thermal abilities, it is probably safe to say that silver demand in global data centers has risen by a similar amount as capital expenditures. Had the amount of silver used in data centers been just 50 million ounces in 2022, it would now be 210 million ounces.
At today's silver price, 210 million ounces is around $12 billion, which is just over 1% of this year's capex spending on data centers. Not exactly a deal breaker.
Capex spending on AI is expected to increase by $6.7 trillion by 2030.
Without a major breakthrough in a technology that replaces silver and copper, there is no way that global supply chains can handle the demand, regardless of price.
In a recent very lengthy paper concerning metals in data centers a large bank went to great detail on lithium, helium and rare earths like antimony and germanium used in the industry.
The word silver was included in a pie chart, but never appeared once in 39 pages of text. It is obvious that silver has become by far the ugliest child in the periodic table. The one that needs to be kept out of sight at all costs, to avoid shaming the entire family.
One area where I suspect that silver demand growth is off the charts is in the military.
In the last several years modern warfare has undergone a dramatic revolution with the ascendency of military drones. Silver's unmatched conductivity, thermal abilities and unique reflectivity make it essential in today's drone technology. Silver zinc batteries are preferred because of their light weight. Silver is also used in flight controllers, sensors, and antennae for critical anti-jamming abilities.
The amount of silver estimated in a military drone varies wildly, with many believing that the low end of the range is 100 grams, or 3 ounces, and estimates for the high end cluster around 15 ounces. Regardless, I would think it a safe bet to say that today's global military demand for silver easily exceeds 50 million ounces, and is quite likely more than 100 million ounces. I thought that perhaps the Silver Institute might include the increase in military use in their "other industrial use", but since 2021 that category, not surprisingly, shows no growth whatsoever, so obviously it is not included.
Turning to the supply side, the Silver Institute estimates mine supply this year down just 2 million ounces from last year at 844 million ounces. The drop will almost certainly be greater. Several large silver miners reported disappointing Q1/2026 production, and in April, Chilean copper production was down 14%. Much of the world's sulphur comes through the strait of Hormuz, and China recently banned sulphuric acid exports. About 74% of silver is produced as a by-product of other metals, most of which need sulphuric acid to extract metal from the ore body.
Silver ore grades also continue to drop. They have dropped by around 30% over the last decade. As the easy silver, the silver closest to the surface has already been mined, this will likely continue. Think of the silver in the ground as a mirror image of the low hanging fruit in an orchard.
I have every reason to believe that mine supply this year will struggle to reach 800 million ounces, not 844 million ounces.
The Silver Institute estimates that 211 million ounces will be recycled this year, of which 41 million ounces will come from jewelry, 30 million from silverware, 16 from photography, and 119 million from industry.
The 41 million ounces from jewelry represents 26% of 2026 silver jewelry sales, more than double the rate of 7 to 10 years ago.
One day we will run out of Downton Abbey silver, but apparently not yet. Back in 2017 to 2019 silverware recycling represented 32% of silverware sales. In 2026 the Silver Institute estimates that recycling now equals 90% of silverware sales
In photographic recycling, 72% of silver demand is estimated to be recovered this year. Of the 278 million ounces used in photography over the last decade, an amazing 195 million, or 71% have supposedly been recovered through recycling. All these numbers seem way over the top to me, but they are small fry compared to the Silver Institute's claims in industrial recycling.
We don't recycle today's silver fabrication, not even in today's disposable society, so one should look at the industrial demand back around 2017 to 2020, to get an idea of what percentage of fabrication the 119 million ounces of today's recycling represents.
If you compare today's recycling to the 2017 to 2020 average industrial fabrication, and strip out solar and automotive where silver is not being recaptured, 119 million ounces of recycling equates to 36% of total industrial production.
It is estimated that only 22% of silver fabrication goes to recycling, as the rest ends up in landfills. In 2017 to 2020 industrial fabrication minus solar and automotive averaged 366 million ounces. If all 22% of that ended up in recycling the total would be 80 million ounces, so where did the other 39 million ounces come from?
What is more, in many other industries, such as wind turbines, the military, and data centers, little to zero is being recaptured. If these are included, then a miracle of Biblical proportions is happening. We are recapturing way more loaves and fishes than were produced in the first place. The mining giant BHP estimates that only 43% of scrap copper is recaptured.
There is no comparison with copper recycling and industrial silver recycling, the vast majority of which comes from electronics, where the silver has been atomised or sprayed in super thin layers. You could pull a lot of the copper out with a hammer and a gloved hand.
The vast majority of industrial recycling of silver comes from electronics.
The average silver demand for 2017 to 2020 in electronics excluding solar was 243 million ounces. If all of industrial recycling came from electronics that would represent a mind boggling capture rate of 49%. Plug in the military and data centers, and the percentage would be way above 50%.
A close friend of mine started a metals recycling business many years ago. That company is now the largest metal recycling business in the world outside of China. The silver extraction rate from the shredded material in his state of the art facilities is a minute fraction compared to other metals. From the numbers that he gave me, I seriously doubt that silver recovered from industry can possibly exceed 20 million ounces, because his actual data suggests that it is far less than that.
From everything that I know about overall silver recycling, I cannot believe that current recycling exceeds 100 million ounces, which is a far cry from 211 million.
In 2025 and 2026 the Silver Institute added 45 and 10 million ounces of hedging respectively to the supply. While hedging may bring forward sales of silver, it does not ultimately add anything to to the physical supply side, and therefore hedging should be excluded.
To sum it all up, here are the differences between my balance sheet for 2026 versus that of the Silver Industry.
- 10 million ounces of hedging is removed from supply.
- Mine production is down 44 million ounces.
- Recycling is down 110 million ounces.
- Jewelry demand is up 190 million ounces.
- Silverware demand is up 30 million ounces.
For industrial demand excluding solar and data centers I presented 3 possible scenarios; 1) using 2011 as a starting point and adding 2.5% annual growth, 2) comparing silver consumption to GDP, and 3) comparing silver demand to copper demand. The increases were 294, 584, and 345 million ounces.
The comparison with copper probably makes the most sense, and therefore my industrial demand excluding data centers and solar is 350 million ounces higher than that of the Silver Institute. My silver demand in data center consumption, which is clearly not in the Silver Institute numbers, is up 200 million ounces. Military demand is up 75 million ounces. Solar demand is up 260 million ounces.
Add it all up, and the deficit is 1.27 billion ounces greater than what the Silver Institute claims.
At some stage one is forced to ask why the stars are always aligned against silver, especially over the last ten years or so. What is so unique about silver that makes the Gods so angry? Why do they defecate on silver from such a great height?
Whenever I read articles by the renewable energy agencies, I became increasingly aware of an almost cult-like devotion to the renewable energy binary narrative; the replacement of fossil fuels or the end of life on earth as we know it.
However the fossil fuel energy replacement, known as renewables, depends heavily on the mining of metals, particularly copper and silver, which are not renewable.
The renewable mantra projects a cozy future, free energy from the wind and the sun, but does not take into account the hollowing out of the earth's increasingly more costly and limited resources and their ever more stretched supply chains, not to mention their environmental costs. The West, run by lawyers, seemingly does not understand the concept of supply chains, and therefore they were blindsided by the shortage of rare earths, a shortage that had been building in plain sight for many years.
The engineers who run China, fully understand supply chains, and have seen all this coming from a mile off. The silver equation is only one step away from the rare earth monopoly acquired by the Chinese over decades of careful planning.
How would the renewable industry and the world's politicians react when they realised that their modus operandi was untenable, because the supply chains on which they rely were going to be stretched beyond the breaking point?
Sticking your head in the sand, turning a blind eye, kicking the can down the road, calling foul, and papering over the cracks would seem like the most likely options available to the current crop of world leaders. Anything other than facing reality, which would mean eating a ton of crow and executing a humiliating 180 degree change of course.
That would be a bit like saying 'World War One a Mistake, Archduke Ferdinand Found Alive!'
I know a 2026 deficit of 1.3 billion ounces sounds completely crazy, and that such numbers will be seen by many as ludicrous, but what is the point of doing all the legwork, if one is then going to massage the numbers in order to fit in with the consensus and curry favour with the crowd? I have never been in that business. Maybe that is why I lack the following of Elvis.
I have reached out to several well known names in the silver industry, but when presented with the above facts, none of them seem to really care too much about how egregiously bad the data is from the only source in the industry, the Silver Institute.
What I find so striking is in the Silver Institute's list of sponsors you will find many of the world's largest mining companies, such as Glencore, Hecla, Peñoles, Fresnillo, Wheaton Precious Metals, etc. The type of companies that you would expect to have large research departments, and be sticklers for due diligence.
If I have ever seen a case for massive rationing, this is it: when, demand exceeds supply by close to 50% for several years in a row, and when the true deficit for the last 8 years probably exceeds 5 billion ounces.
When rationing is thwarted by years of dodgy data the more extreme the final outcome will be. The unwinding of decades of suppression, manipulation, and a complete absence of true price discovery, combined with an extreme inelasticity of supply should be one for the history books.
John Macintosh
04 July 2026