Supply‑demand outlook for 2024 The producer‑funded Silver Institute’s preliminary forecast shows global silver demand slipping 5% to **1.08 billion ounces** this year. Even with the decline, demand will still outstrip the combined output of mines and recycling by roughly **35 million ounces**, creating the **sixth consecutive annual supply deficit** projected for 2026.
Solar industry’s retreat pulls the rug from under silver Solar‑photovoltaic (PV) panels have long been the biggest driver of silver consumption. Over the past five years, solar accounted for **55% of the increase** in silver demand. This year, however, manufacturers are aggressively cutting the metal’s usage, leading to a **21% drop in solar‑related demand**.
> “I would actually say that the record level of solar demand is behind us, and it will continue to weaken,” said **Philip Newman**, managing director at Metals Focus Ltd. He added that solar will remain a **“important part of the market for a good few years,”** but its growth engine is turning into a drag.
BMO Capital Markets notes that by 2030 the solar sector is expected to **give back roughly half of the demand increase** it generated over the previous half‑decade, effectively converting the sector from a growth catalyst to a **negative weight** in the silver market.
Investor dynamics and price volatility Silver’s price trajectory this year has been erratic. Speculative buying pushed the metal up **nearly 70%** in the early weeks of the year, only for it to lose those gains by the end of January. The price then drifted lower, slipping **below $50 per ounce in October** as interest waned.
BMO cautions that the conventional deficit metric can be misleading because it treats bar and coin purchases as demand, even though the metal often stays in above‑ground inventories. By comparing **supply to the amount actually consumed by manufacturers and jewelers**, the bank expects an **increasing surplus**, meaning investors will need to absorb excess metal.
> “If we do start to see some clearer signals and investors then start to recommit, I think there’s plenty of room for them to improve or build exposure,” Newman said.
Pockets of growth amid the slowdown While solar demand collapses, **industrial consumption outside the solar sector is projected to rise 4.5%** in 2024, providing a modest counterbalance. Weak institutional positioning also leaves room for investors to re‑enter the market should sentiment improve.
What this means for the market The combination of a shrinking demand base, especially from solar, and a potential surplus when measured against actual consumption suggests **downward pressure on silver prices** may persist unless investor demand rebounds. The market’s volatility underscores the importance of monitoring both physical consumption trends and investor positioning.
--- *The analysis draws on the Silver Institute’s forecast, comments from Metals Focus Ltd, and a BMO Capital Markets note.*