Silver Miners Grapple With Strike Disruption as Macro Data Steadies Prices Near $57

A twelve-day labour conflict at First Majestic Silver's San Dimas operation has thrust mine-side supply risk back into the silver conversation, just as the metal tries to find its footing after a bruising stretch driven by US inflation and rate expectations.

The dispute, simmering since 18 September, escalated into a formal strike on 8 October, according to media reports. No resumption of operations had been announced as of 12 October. The damage to output was already visible in the quarterly numbers: San Dimas produced 859,869 ounces of silver in the third quarter, a drop of 41% year on year. At the group level, First Majestic reported output of 3.4 million ounces of silver for the quarter, with the twelve-day stoppage at San Dimas weighing on the result.

It was far from the only operational headache across the sector. Endeavour Silver posted just under 2.10 million ounces for the quarter after its Terronera mine was temporarily halted by a blockade in August. Guanajuato Silver, meanwhile, reported quarterly output of 392,138 ounces of silver, with extraction at its Valenciana complex suspended following an August decision to prioritise exploration work there.

Not every producer stumbled. Aya Gold & Silver said on Wednesday that its Zgounder mine delivered record third-quarter production of 1.50 million ounces of silver, up 11% year on year, with consolidated output reaching 2.03 million ounces of silver equivalent.

A Structural Deficit Beneath the Noise

Those mixed operating results land against a global balance that remains tight. The Silver Institute and research house Metals Focus estimate a market deficit of 46.3 million ounces for 2026, following a shortfall of 40.3 million ounces in 2025. Worldwide mine production is expected to stay broadly flat, which gives disruptions at individual operations outsized significance.

For now, however, visible physical supply looks comfortable. London Bullion Market Association vaults held 28,985 tonnes of silver at the end of the third quarter, a modest 3.22% increase from the prior quarter. COMEX inventories told a similar story: a 14 October survey showed stocks up 1.2 million ounces at 333.2 million ounces in total, split between 103.1 million ounces of immediately deliverable metal and 230.1 million ounces in the eligible category.

Macro Data Offers a Reprieve

The futures market has yet to fully price in the fundamental tightness. COMEX front-month silver settled Friday at $57.13 an ounce, a level that leaves it 19% lower since the start of the year and 11% below its 50-day moving average of $64.31.

The week's turn was driven by the macro side. Softer US retail sales and a subdued manufacturing indicator provided relief across commodity markets on Friday. With earlier producer price data having eased pressure on the Federal Reserve, Treasury yields retreated and the dollar weakened, tempering fears of another rate hike in October. The metal had been hit hard before that calm: US consumer prices rising 3.7% year on year and 0.6% month on month stoked worries about a prolonged restrictive stance and sent silver tumbling 6.09% in a single session.

Attention now shifts to the Federal Reserve, with the Federal Open Market Committee due to meet on 27 and 28 October. Whether support from constrained mine capacity can deliver a lasting stabilisation may hinge on that rate decision — and on whether the recent run of softer economic data can keep a lid on rate expectations.