Deutsche Bank published a silver outlook on Friday, October 2, 2026 that projects a market surplus as soon as 2027, according to a report from The Northern Miner dated October 5. Daniel Ghali, the bank's head of metals research, forecasts spot silver averaging 70 dollars per ounce in the second quarter of 2027, which sits below levels reached in the first half of 2026. Silver traded at 60.99 dollars per ounce early Monday afternoon, down about 14 percent since the start of 2026 and about 26 percent above a year earlier.
The report centers on rising inventories. More than 914 million ounces of silver sat in London commercial vaults at the end of August, including more than 300 million ounces freely available for purchase. That freely available supply has grown 70 percent since October 2025. Inventories have also increased in Chicago Mercantile Exchange warehouses and in Shanghai.
Deutsche attributes the shift to weaker demand. The bank estimates global silver use in solar applications will fall more than 20 percent this year, with Chinese solar demand down 33 percent. Silver consumption per solar cell is projected to drop 17 percent in 2026 as manufacturers adopt thinner electrical contacts and copper-coated silver pastes. Silver made up more than 30 percent of solar-module manufacturing costs earlier this year, compared with less than 10 percent at the start of 2025, and that share has since eased to about 14 percent.
With scarcity easing, Deutsche expects investment demand to carry more weight in the price outlook. The bank estimates silver-backed funds could release about 40 million ounces by December 2027 if patterns seen during earlier US Federal Reserve rate-increase cycles repeat. Analysts at JP Morgan have also said physical tightness in the silver market has been unwinding.
Source: The Northern Miner - https://www.northernminer.com/news/silver-shortage-could-flip-to-surplus-in-2027-deutsche/1003895445/