Silver institute: Silver demand surges despite market headwinds [Video]

Amid rising geopolitical tensions, shifting energy policies, and ongoing economic uncertainty, silver remains a vital yet often underappreciated metal. 

In a recent episode of the Money Metals Podcast, host Mike Maharrey spoke with Michael DiRienzo, President and CEO of the Silver Institute, to break down key insights from the 2025 World Silver Survey and examine the forces reshaping the global silver market.

The Silver institute’s global footprint

The Silver Institute was founded in 1971 and is now headquartered in Washington D.C. Although smaller than organizations like the World Gold Council, both in staff and funding, the Institute continues to play an outsized role in market research and silver advocacy.

Its members include major silver miners, refiners, and industrial users. Their mission centers on promoting silver through data publications, policy engagement, and educational outreach.

According to DiRienzo, the Institute has an active presence worldwide, including recent initiatives in China, India, Peru, and Mexico. It regularly participates in global conferences, with upcoming appearances scheduled for Singapore’s Asia Pacific Precious Metals Conference and October’s LBMA event.

Their research output in 2024 alone includes a report on above-ground silver stocks and upcoming studies on silver in batteries and bullion market dynamics. The Institute also stays active on social media and offers a bi-monthly newsletter to keep stakeholders informed.

2025 World Silver Survey: Persistent Deficits

This year’s World Silver Survey (2025) revealed that global demand exceeded supply for the fourth consecutive year, resulting in a market deficit of 148.9 million ounces.

While industrial demand nearly hit a new record—tallying 680.5 million ounces—overall silver demand dipped slightly. This was largely due to a decline in coin and bar sales in the U.S. and Europe, which offset the steady performance of exchange-traded products (ETPs).

China’s economic slowdown partially explains the shortfall in industrial demand. However, India’s appetite for silver has soared, with the country now leading the world in silver jewelry and silverware consumption.

India has also become a major player in silver investment, launching new ETPs almost monthly, a pace that signals a rapid deepening of market participation in the region.

The East rises in Silver demand

A noticeable shift from Western to Eastern silver demand is becoming more pronounced. DiRienzo highlighted how China—now the third-largest silver producer in the world (possibly second-largest)—has dramatically expanded its domestic silver market since lifting restrictions over two decades ago.

Key exchanges like the Shanghai Futures Exchange and the Shanghai Huong have bolstered Chinese silver trading. 

Meanwhile, India is increasingly taking the lead in both retail and institutional demand.

This pivot mirrors similar trends in gold, where Asian markets—particularly China—have become dominant forces. The Silver Institute has cultivated strong relationships with Chinese and Indian silver stakeholders, recognizing these countries as essential to the future of global silver demand.

Understanding the Silver deficit

The concept of a market deficit can be confusing, especially since silver remains available for industrial and investment use. DiRienzo explained that the deficit reflects the fact that annual demand has exceeded annual mine supply since 2021, creating an ongoing structural imbalance.

Above-ground silver reserves—held in the form of coins, bars, and ETPs—are helping fill the gap. The market hasn’t experienced an actual shortage, but it is drawing down inventory to satisfy rising demand.

Supply constraints have been worsened by geopolitical instability and labor disruptions in major mining regions. Meanwhile, silver demand continues to grow, particularly for electronics and solar applications.

DiRienzo emphasized that while mine output may increase in the future, no major new discoveries have been made, and the 2025 deficit will likely mark the fifth consecutive year of this trend.

Pricing pressures and investor sentiment

Despite ongoing deficits and industrial growth, silver prices remain far below their 2011 peak near $50/oz. In contrast, gold continues to climb, breaking records thanks to strong central bank buying and institutional investment.

DiRienzo explained that silver lags behind due to multiple headwinds. These include less institutional interest, European VAT taxes on silver coins, and the psychological weight of large above-ground inventories that depress urgency among investors.

The gold-to-silver ratio hovers near 100:1, a historically high figure that suggests silver is undervalued. DiRienzo believes that as industrial demand tightens supplies, institutional investors may begin to take another look at silver.

To that end, the Silver Institute is planning a roadshow to major financial institutions. The goal is to highlight silver’s long-term value proposition—particularly its critical role in the global energy transition.

Green energy as a demand anchor

Silver’s unique dual role—industrial material and monetary asset—positions it well for sustained demand growth. As governments around the world ramp up clean energy initiatives, silver is increasingly essential for solar panels, electric vehicles, and digital infrastructure.

DiRienzo pointed out that anything with an on/off switch contains silver. From circuit boards to battery systems, the metal’s high conductivity makes it irreplaceable in modern technology.

He acknowledged that U.S. lawmakers are currently rethinking green energy incentives, but emphasized that other countries are pushing ahead aggressively. That global momentum ensures a solid demand floor for silver, even during potential recessions.

National defense and hidden demand

Silver’s use in defense is significant, though hard to quantify. DiRienzo noted that from World War II through the 1960s, the U.S. government published figures on silver’s military applications—but no longer.

Today, data on military silver consumption is sparse. However, guided missiles, drones, and modern communications systems all rely on silver components. These uses are bundled into the Institute’s “other” demand category, but are widely understood to be essential.

DiRienzo declined to estimate how much silver is used in defense, citing a lack of transparent data. Still, he underscored that its importance in the defense sector continues quietly in the background.

Resilience through uncertainty

Recent fears over U.S. tariffs on silver imports exposed both the market’s vulnerabilities and its resilience. When a 25% tariff loomed over imports from Canada and Mexico, banks and refiners acted swiftly, rushing physical metal into U.S. vaults.

Though bullion was ultimately exempted in the April 2, 2024, trade note, the event underscored how quickly policy shifts can ripple through global markets.

DiRienzo expressed skepticism about tariffs, favoring fair trade policies instead. Still, he applauded the silver industry’s ability to adapt under pressure, comparing it to how businesses adjusted during COVID-19. The takeaway: silver’s supply chain, while fragile, is also highly responsive.

Looking ahead

The Silver Institute is set to publish an interim report in November, offering a mid-year update on the 2025 market. In the meantime, it continues to support global awareness through research, conferences, and digital outreach.

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