Is the World Actually Running Out of Silver?

Silver, a precious metal with a long history, has been valuable across many civilizations, from ancient coinage to modern technological applications. Its unique properties drive interest in its availability. This analysis examines silver resources, production, and consumption to understand if global reserves are diminishing.

Assessing Global Silver Reserves

Silver reserves refer to the quantity of silver that has been discovered and can be economically extracted using current technology and market prices. This differs from silver resources, which include all known occurrences, regardless of economic viability. As of 2023, global silver reserves are estimated to be around 550,000 to 610,000 metric tons. These figures are not static and can change with advancements in extraction techniques or shifts in commodity prices.

Peru holds the largest known silver reserves, with approximately 140,000 metric tons. Other nations with substantial reserves include Russia (92,000 metric tons), China (70,000 metric tons), and Poland (61,000 metric tons). Mexico, despite being a top producer, holds about 37,000 metric tons in reserves. Australia (27,000 metric tons), Chile (26,000 metric tons), and the United States (23,000 metric tons) also have significant reserves. These geographical concentrations highlight key regions for future mining activities.

Understanding Silver Production Sources

Silver enters the global supply chain primarily through mine production and recycling. Mine production is the dominant source, though a significant portion of mined silver is obtained as a byproduct.

Approximately 70% to 80% of newly mined silver is extracted as a byproduct from ores primarily mined for other metals like lead, zinc, copper, or gold. Only 20% to 30% comes from dedicated primary silver mines. In 2023, global silver mine production reached 830.5 million ounces. Mexico was the leading producer, followed by China, Peru, Chile, and Bolivia.

Recycling plays a noteworthy role in supplementing the primary supply of silver. In 2023, recycled silver contributed 178.6 million ounces to the total supply, accounting for 18% of the market. This recycled silver comes from diverse sources, including industrial scrap from manufacturing processes, discarded jewelry, and silverware. The industrial sector, particularly the recycling of ethylene oxide catalysts, was a primary driver for volumes in 2022 and 2023. This trend towards increased recycling reflects growing emphasis on resource recovery and the rising value of silver in industrial applications.

The Many Uses of Silver and Its Demand

Silver’s unique properties, including its exceptional electrical and thermal conductivity, make it suitable for a wide array of applications, driving its global demand. Industrial uses account for the largest share of silver consumption. In 2023, industrial demand for silver reached a record high of 654.4 million ounces.

Within the industrial sector, silver is extensively used in electronics, particularly in conductors and contacts, due to its superior conductivity. The solar energy sector is another significant consumer, with silver being a component in photovoltaic cells to convert sunlight into electricity. Demand for silver in photovoltaics surged by 64% in 2023, reaching 193.5 million ounces. The automotive industry also uses silver in various electrical connections and components, especially with the growth of electric vehicles.

Beyond industrial applications, silver maintains its traditional roles in consumer goods and as an investment vehicle. Jewelry fabrication consumed 203.1 million ounces in 2023, while silverware demand accounted for 55.2 million ounces. Investment demand, encompassing silver coins, bars, and exchange-traded funds, totaled 243.1 million ounces in 2023. These varied uses underscore silver’s versatile nature, contributing to a complex demand profile influenced by both economic and technological factors.

Current State of Silver Supply and Demand

In 2023, total silver demand was approximately 1,195 million ounces. This demand was met by a total supply comprising mine production and recycling, among other minor sources. The market experienced a structural deficit of 184.3 million ounces in 2023.

This deficit marked the third consecutive year that demand outstripped supply. From 2021 to 2023, the cumulative deficit amounted to 474 million ounces. Projections indicate the market will continue to face deficits, with an anticipated shortfall of 215.3 million ounces in 2024 and 117.6 million ounces in 2025.

Despite these persistent deficits, the world is not “running out” of silver in the short to medium term. While mine production has declined since its 2016 peak, ongoing supply from mining and increasing recycling help meet demand. The continuous deficits indicate a tightening market, but not an immediate depletion of the metal.