The Silver Institute forecasts silver industrial fabrication declining 2 percent in 2026 to roughly 650 million ounces, the lowest level in four years. The decline traces primarily to photovoltaic manufacturing, where thrifting and partial substitution have reduced silver content per panel even as global solar installations continue rising.

Offsetting demand is developing in other industrial categories. The institute identifies data center construction, artificial intelligence hardware applications, and automotive electrification as areas expected to absorb part of the photovoltaic decline.

Investment demand is moving in the opposite direction. Physical investment is forecast to rise 20 percent to 227 million ounces, a three-year high, as bar and coin buyers respond to price levels reached during the first half of the year.

The market balance remains in deficit for a sixth consecutive year. The projected 2026 shortfall of 46.3 million ounces widens from 40.3 million ounces in 2025. Structural deficits of that duration draw down above-ground inventories, which is the mechanism that exposes the market to squeezes when investment demand accelerates.

Silver industrial fabrication at 650 million ounces still represents the largest single demand category in the market.

Source: Investing News Network - https://investingnews.com/silver-institute-forecast/