Solar's Thrift Leaves Silver Facing a Sixth Straight Shortfall

Silver settled at $61.35 an ounce, still under its 50-day average, as solar silver demand is forecast to fall to 151 million ounces in 2026.

Silver's near-term direction hangs on a single US data release, but the metal's deeper story is being rewritten on factory floors rather than trading desks. Photovoltaic manufacturers — long the industry's most voracious silver consumers — are learning to do more with less, and the arithmetic is starting to show.

A 35-Million-Ounce Hole in Solar Demand

Industry forecasts put global silver consumption for photovoltaic applications at roughly 151.0 million ounces in 2026, down sharply from 186.6 million ounces in 2025. The pullback is unfolding even as solar installations keep roaring ahead: SEIA and Wood Mackenzie tallied 11.4 gigawatts of new US capacity in the second quarter, a 45 percent jump from the same period a year earlier. Thinner silver loadings per cell, driven by efficiency gains and leaner manufacturing processes, are offsetting much of that volume growth.

Refining Backlogs Meet Ample Vault Supply

The physical supply chain is sending mixed signals of its own. According to the Scottsdale Mint, silver refining is running three to four months behind depending on the material involved — yet refined metal remains readily available in the US market. Exchange inventories tell a similarly uneven story. COMEX stockpiles climbed about 2.5 million ounces in the week of September 18 to 25, reaching 332.6 million ounces, even as registered holdings fell by 1.0 million ounces. Over on the Shanghai Futures Exchange, registered warrants slipped 4,605 kilograms on September 28 to 1,439,291 kilograms.

A Modest Bounce, Still Below the 50-Day Line

Against that fundamental backdrop, macro forces are calling the tune. Silver settled Thursday on COMEX at $61.35 an ounce, up 1.0 percent on the day, as a slight retreat in US Treasury yields gave the metal room to recover from recent selling pressure. Even so, the price remains under its 50-day average of $65.46 — a gap that underscores how cautious traders have become. The Stuttgarter Zeitung reported on September 28 that rising US bond yields, a firmer dollar and expectations of a tighter Federal Reserve stance had weighed heavily on silver. Higher rates dull the appeal of yield-free assets, while a stronger greenback makes the commodity costlier for buyers outside the dollar bloc. The Fed's next regular meeting in October looms as the following policy checkpoint.

Sixth Deficit in a Row — But Macro Still Wins

Set against the rate-driven headwind is a persistently tight physical balance. Projections from the Silver Institute and consultancy Metals Focus see the global market heading for a sixth consecutive supply deficit in 2026, with the gap between worldwide mine output and combined industrial and private demand estimated at 46 to 67 million ounces. That structural shortfall has not been enough to arrest the recent slide. The deficit underpins the longer-term case, yet near-term uncertainty over central bank policy holds sway. Friday's September US employment report, slated for 12:30 GMT, now serves as the next marker for how silver enters October. Traders will also watch for the CFTC's positioning data, with the next regular release due October 9.