Silver's Industrial Surge: Why Supply Deficits Could Lift ASX Silver Stocks in 2026

While gold commands headlines above US$5,000 per ounce, silver has been quietly building a case of its own. The white metal surged over 130% in 2025 and briefly broke through US$100 for the first time in January 2026, before pulling back to around US$75 as of mid-February.

But the real story isn't the price spike, it's what's driving it. Unlike gold, which moves largely on safe-haven flows, silver sits at the intersection of precious metal and industrial commodity. That dual identity is what makes the current setup different from previous cycles, and why ASX silver stocks are drawing renewed attention.

The Industrial Demand Engine

Silver's industrial story has shifted from a slow tailwind to a structural force. According to the Silver Institute's December 2025 report, industrial demand across solar energy, electric vehicles, and AI data centres is expected to keep growing through 2030.

Solar energy remains the biggest driver. Silver paste is essential in photovoltaic cells for collecting and transporting electricity. The solar sector accounted for roughly 29% of total silver demand in 2024, up from just 11% in 2014. China installed more solar panels than the rest of the world combined in the first half of 2025, and the EU has mandated solar integration in new buildings from 2026.

Electric vehicles use roughly 25 to 50 grams of silver each, about three times more than a petrol car. Oxford Economics forecasts automotive silver demand will grow at 3.4% annually through 2031, with EVs overtaking combustion vehicles as the primary demand source by 2027.

AI and data centre buildout adds a newer demand layer. Global IT power capacity grew roughly 53 times between 2000 and 2025, and silver is needed in high-efficiency electrical components and thermal management systems across this infrastructure.

‍

A Supply Crunch with No Quick Fix

Supply simply cannot keep up. The Silver Institute confirmed in February 2026 that the market is heading for its sixth consecutive year of structural deficit, and demand continues to exceed total supply from mining and recycling.

Global mined output has stayed flat at around 813 million ounces per year. Cumulative deficits from 2021 to 2025 total roughly 820 million ounces, nearly a full year of global production. And about 70% of silver is produced as a by-product of copper, zinc, or gold mining, meaning higher silver prices alone cannot easily unlock new supply.

China introduced silver export controls from January 2026, limiting authorised exporters to just 44 companies. Given that China handles 60–70% of global silver refining, this tightens the downstream supply further.

Bank of America maintains a long-term forecast range of US$135 to US$309 per ounce, while J.P. Morgan projects an average of US$81 for 2026. The gold-to-silver ratio near 66:1 remains well above its long-term average of roughly 50:1, a level some analysts interpret as silver being undervalued relative to gold.

ASX Silver Stocks: A Small but Growing Landscape

Pure-play silver exposure on the ASX remains limited, but several companies offer leverage to the silver price. DPM Metals (ASX: DPM) operates a producing silver mine in Bosnia, targeting full processing capacity by the end of 2026. Silver Mines (ASX: SVL) holds the Bowdens project in NSW, Australia's largest undeveloped silver deposit with 180 million ounces in resources. Sun Silver (ASX: SS1) controls Maverick Springs in Nevada with 539 million ounces globally.

These are not recommendations. SVL awaits final permitting (expected mid-2026), SS1 remains in exploration, and DPM operates in an emerging-market jurisdiction. Silver's sharp volatility, including January's correction from US$121 to below US$80 in a single session, and any slowdown in Chinese industrial demand represent real headwinds.

Investor Takeaway

• Industrial demand from solar, EVs, and AI is creating structural silver consumption beyond traditional safe-haven buying
• Six consecutive supply deficits and China's export controls are tightening physical silver globally
• ASX silver stocks offer leverage to these trends, but volatility, permitting risk, and jurisdiction factors require careful consideration

For investors seeking exposure to precious metals trends, download ASR's free Top-3 Stocks & Market Outlook Report for detailed analysis and stock recommendations.

‍