As global energy transition accelerates, silver — an indispensable industrial metal in the solar supply chain — is entering an unprecedented demand peak. According to the latest industry data, global solar panel demand for silver is expected to exceed 650 million ounces in 2026, up over 9% year on year, keeping the market in supply deficit for a fourth consecutive year. Spot silver prices rose more than 10% in July, making silver the best performer in the precious metals sector.
Solar Industry Spurs Structural Growth in Silver Demand
Driven by carbon neutrality goals and policy subsidies, global solar installations continue to beat expectations. Each high-efficiency solar cell consumes about 100–150 milligrams of silver, and with rising penetration of N-type cell technology, silver consumption per unit is climbing rather than declining. The latest outlook from the International Energy Agency (IEA) indicates that annual silver consumption in the solar sector could reach 800 million ounces by 2030, accounting for over 30% of global silver demand.
Supply Bottlenecks Widen as Mine Output Stalls
In sharp contrast to robust demand, global silver mine supply is growing slowly. Since a large share of silver output comes as a byproduct of lead and zinc mining, and stricter environmental policies lengthen approval times for new mining projects, global silver mine production rose just 0.8% year on year in the first half of 2026. According to preliminary data from the Silver Institute, the global silver market deficit is set to expand to 120 million ounces in 2026, an increase of 20 million ounces from last year.
Exchange Inventories Slide to Multi-Year Lows
The immediate effect of the prolonged shortage is a rapid drawdown of silver inventories at major exchanges. By end-July, London Bullion Market Association (LBMA) eligible silver stocks had fallen below 25,000 metric tons, the lowest since 2019; COMEX silver inventories also dropped to around 11,000 tons. Continued inventory declines intensify physical delivery pressure, keeping silver prices prone to gains rather than falls.
Silver Offers More Upside Than Gold
Combining industrial and financial attributes, silver tends to outperform gold amid macroeconomic uncertainty. Although a firmer U.S. dollar index recently weighed on precious metals overall, silver has shown stronger resilience thanks to its solid supply-demand fundamentals. Market analysts note that if global recovery expectations strengthen, silver’s industrial demand will benefit first; if geopolitical risks escalate, its safe-haven appeal should not be underestimated.
Local Market Link: Dhaka Silver Prices Rise in Tandem
The global silver strength has also transmitted to Bangladesh’s domestic market. Data from the Dhaka Precious Metals Exchange show silver trading prices rose about 12% on August 2 from end-July, with per-ounce quotes breaking above $35. Local jewelry makers and industrial users are feeling significant cost pressure, and some companies are building silver inventories to hedge against further price gains.
Outlook: Institutions Mostly Bullish on Silver
Several international investment banks have raised their silver price targets in latest strategy reports. Goldman Sachs expects silver to reach $40 per ounce over the next 12 months, citing the convergence of solar demand growth and mine supply bottlenecks. Citi emphasizes that with accelerating global green infrastructure investment, silver is entering a “supercycle.” Still, investors should remain alert to short-term volatility from possible tighter-than-expected Fed policy or global recession risks.
Overall, silver is shifting from being “gold’s shadow” to an industrial metal with its own independent logic. For those focusing on precious metals investment, with prices rising rapidly while the supply deficit continues to widen, silver may be offering an increasingly attractive entry point.
