About 75% of the world’s silver is produced as a by-product of mining zinc, copper and gold, so output can’t easily increase unless production of those main metals also rises from existing mines. Contributing to the supply squeeze is the fact that the quality of ore of existing primary silver mines—which account for the remaining fourth of global silver production—is also deteriorating.
“Silver production is unlikely to increase significantly because, unlike oil, it can’t simply be ramped up through more mining,” said Vishal Iyer, partner at Rational Equity Partners, a boutique investment management firm with investments in gold and silver mining companies.
New mines can’t help, either. Exploring and developing new mines typically takes several years.
Net result: fall in silver production and a concurrent spike in prices of the metal.
Data from global industry body The Silver Institute showed that the annual mining of silver worldwide has declined from 900 million ounces in 2016 to an expected 835 million ounces in 2025.
To be sure, an increase in recycling of the metal has helped compensate somewhat—total supply, including recycling, remained steady at around 975-1,025 million ounces since 2017. The supply in 2025 is expected to be 1,031 million ounces, according to The Silver Institute. An ounce is one-16th of a pound.
Meanwhile, silver prices topped $50 an ounce for the first time this week, according to Bloomberg spot prices. This is a 61% jump from the same time last year and an all-time high.
The demand curve
The demand for silver has increased in recent years as it finds use in growing industries like solar cells and electric vehicles. The metal has made itself an attractive preposition for investors, too, offering an alternative to gold.
“The popularity of silver has been cooking for some time,” said Srinivas Kotamarthi, chief executive officer of eBullion, a platform for investing in precious metals. “Customer awareness has shot up in the last 1-2 years. Today, investors are inquiring about investing as little as ₹1,000 in silver bullion.”
Production slowing
The global demand for silver has consistently outstripped supply every year since 2021, as per The Silver Institute. In 2024, silver demand was 149 million ounces more than supply. In 2025, the demand is expected to outgrow supply by 118 million ounces.
In the medium term, silver production growth is expected to remain constrained at 2-4%, including from recycling, as it typically takes 8-15 years to move from the exploration stage to commercial production, Iyer said.
That translates to an incremental production of 20-40 million ounces — well below the deficit, which could go up if investment demand stays elevated. “This production growth will not be enough to meet the deficit in supply,” he said.
Meanwhile, Indian silver imports jumped 115% to 247.4 million ounces in 2024, the second highest total on record, as per World Silver Survey 2025. The sharp increase was driven by strong investment demand, covering bars, coins, and exchange-traded products.
Production ramp up
Hindustan Zinc, the only silver producer India and among the top five globally, has an installed capacity of 800 tonnes per annum. It produces silver as a by-product of zinc and lead. The company has guided for production of 700-710 tonnes of the precious metal in FY26. A tonne is 35,274 ounces.
The Vedanta Group company’s board approved doubling its metal production capacity over the next five years at an investment of ₹12,000 crore. The annual silver production capacity will go up to 1,500 tonnes as part of this expansion plan.
Notably, the top five companies that produce silver are Mexico-based Fresnillo, Poland-based KGHM Polska Miedz, US-based Newmont, Hindustan Zinc and Canada-based Pan American Silver, as per The Silver Institute.
Outlook
“We maintain a positive outlook on silver, driven by constrained supply amid robust demand,” Iyer said.
This stems from a persistent long-term shortage and barriers to expanding production, coupled with broader global factors-such as declining confidence in the US dollar due to unsustainable fiscal deficits, a rapidly growing debt burden, and the Federal Reserve cutting interest rates while inflation remains above target, he added.