Solar panels and electronics consumed 678 million ounces more silver than mines produced between 2021 and 2024, yet streaming firms face margin pressure as manufacturers substitute away from the metal and macro flows dominate price signals . [1] [2]
Industrial demand for silver reached a record 680 million ounces in 2024, the fourth consecutive annual high, driven by photovoltaic installations, grid infrastructure, and artificial-intelligence hardware . Over the same four-year span, the global silver market ran a cumulative deficit equivalent to ten months of mine supply, as consumption outstripped production and recycling combined . The combined deficits for 2021 through 2024 totaled 678 million ounces, a shortfall that would ordinarily signal windfall profits for the companies that finance mines in exchange for discounted metal . [3] [1] [4]
Yet Wheaton Precious Metals and Franco-Nevada, the two largest streaming firms, have not enjoyed the textbook rewards of a supply crunch . The reason lies in a collision between structural demand growth and two offsetting forces: cost-driven substitution in the largest industrial application, and a silver price increasingly steered by macroeconomic sentiment rather than physical tightness . The World Silver Survey 2025, prepared by Metals Focus for the Silver Institute and released in April of that year, documents the scale of the imbalance and the forces that have prevented it from translating into sustained margin expansion for streaming companies . [5] [6] [7] [8] [9]
Demand continued to benefit from structural gains linked to the green economy, including investment in grid infrastructure, vehicle electrification, and photovoltaic applications, and was further boosted by end-uses related to artificial intelligence, which drove growth in consumer electronics shipments . At the same time, mine production rose only modestly—up 7 million ounces in 2024, underpinned by increased output from lead and zinc operations in Australia and the recovery of supply from Mexico as Newmont's Peñasquito mine returned to full production . Silver production from lead and zinc mines remained the dominant source but output was flat year-on-year, and Mexico remained the leading producer, followed by China, Peru, Bolivia, and Chile . [10] [11] [12] [13] [14]
The Photovoltaic Surge and the Substitution Response
Solar photovoltaic manufacturing has been the primary driver of incremental silver demand, with consumption rising from approximately 80 million ounces in 2016 to an estimated 196 to 200 million ounces by 2024, representing about 17 percent of global demand . Industrial uses now represent roughly 60 percent of total consumption, making input cost dynamics central to price formation . Global solar photovoltaic capacity additions are projected to reach 467 gigawatts in 2024, marking a 460 percent increase compared to 2015 levels . The International Energy Agency forecasts that from 2024 to 2030 over 4,000 gigawatts of new solar capacity will be added, comprising 80 percent of total renewable capacity expansion . [15] [16] [17] [18]
In just the past two years, China installed an impressive 470 gigawatts of solar power, far exceeding its total capacity from the previous decade . According to the International Energy Agency, solar photovoltaics are projected to surpass all other renewable energy sources by 2030 . The signing of the Paris Climate Agreement marked a turning point for renewable energy demand, as signatory countries committed to reducing carbon emissions and greenhouse gases . Initially, hydropower and wind energy gained momentum, but solar power has rapidly caught up, driven by ease of installation and cost-effectiveness . What began with rooftop solar installations has expanded into the development of large-scale solar parks . [19] [20] [21] [22] [23] [24]
Yet as silver prices climbed, the metal's share of solar cell costs rose from less than 5 percent historically to approximately 30 percent, forcing Chinese manufacturers facing overcapacity and margin compression to accelerate cost optimization . Solar photovoltaic cost inflation has increased silver from less than 5 percent of solar cell costs historically to approximately 30 percent, accelerating substitution toward copper metallisation and cadmium telluride thin-film technologies . This substitution introduces a new cyclical sensitivity: the very demand growth that underpins the deficit narrative also contains the mechanism of its own reversal if prices rise too far or too fast . [2] [25] [26]
Industrial demand risk is rising despite structural supply deficits of 100 to 250 million ounces since 2021, and inelastic by-product mine supply representing approximately 70 percent of total output . China accounted for the highest industrial gains in 2024, at 7 percent, followed by India with 4 percent, underscoring the geographic concentration of demand growth . The rapid expansion of solar photovoltaic capacity is driving a sharp increase in the demand for silver, as the metal is crucial in enhancing the efficiency of solar panels . [27] [28] [29]
Key figures reported by cited sources
A sourced, like-for-like view of the figures that frame this part of the story.
- 68% High and Low mark the edges of the 68% range around the Average: the…
- 5 million 5 million ounces (Moz), reaching a new record high for the fourth…
- 680 million Image courtesy of The Silver Institute Industrial demand established…
- 678 million The combined deficits for 2021 through 2024 totaled 678 million…
- 7% China accounted for the highest industrial gains, at 7%, followed by…
- 46% (-46%), due to profit-taking at higher prices, market saturation,…
Mine Supply: Inelastic, Concentrated, and Slow to Respond
The supply side offers little relief. Primary silver mines—where silver is the main product—account for only approximately 30 percent of global silver production . Mining output has faced significant headwinds due to chronic underinvestment in exploration and development over the past decade, declining ore grades at existing silver mines reducing yield per ton of processed material, increasing production costs driving marginal producers out of the market, and environmental and regulatory hurdles extending timelines for new mine development . [33]
The silver market has experienced seven consecutive years of supply deficits, creating persistent pressure on available physical metal . This long-term trend reflects a fundamental imbalance where industrial and investment demand consistently outpaces mining production and recycling combined . The U.S. Geological Survey's Mineral Commodity Summaries 2024 provides salient statistics and world production data, confirming the structural constraints on new supply . [34] [35] [36]
The silver market is experiencing a perfect storm of supply constraints and growing demand that has led to a significant market imbalance . This imbalance has contributed to silver's impressive performance, with prices rising approximately 28 percent year-to-date, making it one of the best-performing commodities in the current market . Silver has been used for thousands of years as ornaments and utensils, for trade, and as the basis for many monetary systems . Of all the metals, pure silver has the whitest color, the highest optical reflectivity, and the highest thermal and electrical conductivity . Owing to the above properties, silver has many industrial applications such as in mirrors, electrical and electronic products, and photography, which is the largest single end use of silver . [37] [38] [39] [40] [41]
Streaming Contracts: Fixed Terms in a Shifting Market
Wheaton Precious Metals provides mining companies with capital to develop or expand mines via streaming contracts . Under the terms of these agreements, Wheaton pays a miner a fixed up-front fee in exchange for the right to buy a portion of the gold or silver produced from the mine at a fixed rate . For example, in November the company acquired a gold stream on the Spring Valley project in Nevada, paying 670 million dollars in cash upfront in installments to the mine's developer . These contracts enable the streamer to buy metals at low rates, allowing it to cash in on higher market prices . [42] [43] [44] [45] [46]
Both companies have powerful moats rooted in the long-term nature of their contracts, which carry extremely high switching costs for their mining partners . Brand is a key advantage; Franco-Nevada, as the first publicly traded precious metals royalty company with a roughly 30-year history, has a premier reputation . Franco-Nevada is the largest royalty and streaming company by market capitalization and represents the gold standard in the sector . It competes directly with Wheaton Precious Metals for large-scale financing deals, but with a more diversified portfolio and a pristine, debt-free balance sheet . [47] [48] [5] [6]
Franco-Nevada's primary advantage is scale and diversification, with a portfolio of over 400 assets compared to Wheaton's more concentrated portfolio focused on around 20 producing mines . This diversification reduces Franco-Nevada's reliance on any single asset . While Wheaton Precious Metals offers stronger leverage to silver, Franco-Nevada's greater scale, broader commodity exposure including energy, and lower financial risk profile position it as a more conservative, premium-quality competitor . Wheaton's more concentrated portfolio of high-quality assets offers a different risk-reward proposition, with potentially higher upside from its key streams but also greater single-asset risk . [49] [50] [51] [52]
Franco-Nevada holds a growing portfolio of streaming contracts tied to some of the world's best mines . Developers and producers with low operating costs, by-product credits, and critical-minerals exposure demonstrate relative resilience under shifting demand dynamics . [53] [54]
Macro Flows Overwhelm Physical Signals
Silver's 2025 price action was driven by macrofinancial, policy, and retail flows rather than exchange-traded-fund accumulation, increasing volatility and weakening traditional institutional signals . The decline in total demand in 2024 was primarily driven by weakness in physical investment and slightly lower silverware and photographic demand . Physical investment fell sharply—down 46 percent—due to profit-taking at higher prices, market saturation, and investors' reaction to Donald Trump's election as president . In Germany, the lingering effects of the 2023 value-added-tax hike on certain silver products continued to weigh on demand . [7] [55] [56] [32] [57]
This dynamic explains why four years of cumulative shortfalls have not produced a sustained price breakout: the deficit is real, but it competes with macroeconomic forces that often dominate short- to medium-term price formation . Industrial demand for silver reached record highs in each of the last four calendar years . The combined deficits for 2021 through 2024 totaled 678 million ounces, equivalent to 10 months of global mine supply in 2024, according to the Institute . [1] [7] [58] [4]
Selected reported million figures
A sourced, like-for-like view of the figures that frame this part of the story.
- 5 million 5 million ounces (Moz), reaching a new record high for the fourth…
- 680 million Image courtesy of The Silver Institute Industrial demand established…
- 678 million The combined deficits for 2021 through 2024 totaled 678 million…
- 250 million - Industrial demand risk is rising despite structural supply…
- 80 million Industrial Cost Pressures & Policy Liquidity Are Redefining Silver…
- 232 million 5 million ounces, and it's projected to reach 232 million ounces in…
Recycling and the Limits of Secondary Supply
The World Silver Survey includes current information on prices and leasing rates, mine production, silver trade, above-ground stocks, and investment . The 88-page report provides an outlook for the silver market in 2025 . The Survey was researched and produced for the Silver Institute by Metals Focus, the London-based independent precious metals consultancy . Material and statistics in this section were adapted in part from the Silver Institute's World Silver Survey 2025 . [60] [61] [9] [62] [63]
The Silver Institute has since 1990 published World Silver Survey, an annual report on the global silver market . The Survey provides market participants with supply and demand statistics for key sectors of the silver market, as well price and trade data . The Silver Institute works with the Metals Focus team, a leading research company that is based in London, to prepare and publish a comprehensive report on the previous year's silver supply and demand trends, with special emphasis on key markets and regions . This annual survey also includes current information on prices and leasing rates, mine production, silver trade, above ground stocks, and investment . [64] [65] [66] [60]
Divergent Fortunes Among Streaming Firms
Streaming companies with exposure to mines in stable jurisdictions and diversified end-markets are better positioned to weather substitution risk in photovoltaics, while those heavily weighted toward silver face the dual challenge of macro-driven price volatility and the threat of technological displacement . The geographic concentration of demand growth in China and India, combined with the substitution pressures in photovoltaics, creates a bifurcated outlook for streaming firms depending on their asset mix and contract terms . [26] [54] [28] [2]
Franco-Nevada has an ideal business model for the precious metals industry . Comparing the expected price range of both stocks over the same horizon helps you see which one the AI expects to move further, and how much uncertainty comes with it . High and Low mark the edges of the 68 percent range around the Average: the price is estimated to land inside it about 7 times out of 10, and outside it the other 3 . A narrow range means consistent history and a reliable track record . Ranges widen at longer horizons, and the Low reflects realistic downside . [67] [68] [30] [69] [70]
The Forward Outlook: Structural Support, Cyclical Headwinds
Supply constraints and emerging demand from electric vehicles and artificial-intelligence infrastructure provide a potential price floor, but elasticity in solar introduces new cyclical sensitivity . Demand continued to benefit from structural gains linked to the green economy, including investment in grid infrastructure, vehicle electrification, and photovoltaic applications . Demand was further boosted by end-uses related to artificial intelligence, which drove growth in consumer electronics shipments . [26] [10] [11]
Industrial demand risk is rising despite structural supply deficits of 100 to 250 million ounces since 2021, and inelastic by-product mine supply representing approximately 70 percent of total output . Notably, during 2021-2024, the combined deficit reached 678 million ounces, equivalent to 10 months of global mine supply in 2024 . These and other key aspects of the 2024 silver market are examined in the World Silver Survey 2025, released in April 2025 by the Silver Institute . [27] [1] [8]
The central puzzle—why a deficit equivalent to ten months of mine supply has not lifted streaming companies more decisively—resolves into three interlocking answers . Substitution in the largest growth sector limits price upside, as solar photovoltaic cost inflation has increased silver from less than 5 percent of solar cell costs historically to approximately 30 percent, accelerating substitution toward copper metallisation and cadmium telluride thin-film technologies . Primary silver mines account for only approximately 30 percent of global silver production . And macro flows often override physical tightness in short-term price formation, as silver's 2025 price action was driven by macrofinancial, policy, and retail flows rather than exchange-traded-fund accumulation . [1] [2] [33] [7]
For investors weighing exposure to silver through streaming equities, the lesson is that structural deficits are necessary but not sufficient: the path from physical shortage to financial return depends on cost curves, contract terms, and the willingness of industrial users to pay up rather than switch away . The four-year shortfall is real, but the forces that prevent it from translating into windfall profits—substitution, inelastic supply, and macro dominance—are equally real, and they will continue to shape the outlook for streaming companies as long as photovoltaics remain the largest source of incremental demand . [2] [26] [1] [15] [7]