Silver Industrial Demand Explodes! PV Silver Usage Surges, Will 2026 Silver Prices Break All-Time Highs?

Photovoltaic Industry Drives Record Silver Demand

On July 29, 2026, the latest industry data shows that silver industrial demand grew 12% YoY in the first half of 2026, with photovoltaic silver usage rising to 25%, becoming the core driver of silver consumption. According to the International Silver Institute, global PV installed capacity is expected to exceed 400GW in 2026, driving silver demand to over 8,000 tonnes, nearly doubling from 2020.

As global energy transition accelerates, silver's industrial attributes become increasingly prominent as a key conductive material for photovoltaic cells. China Photovoltaic Industry Association data show that China added 110GW of new PV installations in H1 2026, up 30% YoY, significantly boosting silver demand. Additionally, emerging industries such as 5G base stations and electric vehicles continue to increase silver usage, further solidifying silver's position as an industrial metal.

Supply-Demand Gap Widens, Silver Prices Gain Strong Support

In 2026, global silver production is expected to be 32,000 tonnes, while industrial and investment demand totals over 35,000 tonnes, resulting in a supply-demand gap of about 3,000 tonnes, the fourth consecutive year of structural deficit. Data from the London Bullion Market Association (LBMA) shows that on July 28, the international silver price closed at $31.25 per ounce, a new yearly high, up 18% from the beginning of the year.

Analysts point out that after silver prices broke through the $30 mark, the technical pattern formed a strong breakout. Tight supply-demand fundamentals coupled with green energy policy dividends create a clear long-term bullish logic. UBS Group raised its 2026 average silver price forecast to $32 per ounce in its latest report, and believes it may challenge $35 in the second half of the year.

Gold-Silver Ratio Continues to Decline, Silver Valuation Advantage Clear

The current gold-silver ratio is about 75:1, at a historically low range, meaning silver is undervalued relative to gold. Historical data shows that when the ratio is above 80, silver often experiences catch-up rallies. With the explosion of silver industrial demand, the ratio is expected to narrow further below 70, providing additional upward momentum for silver.

World Gold Council data shows that global gold ETFs saw a small outflow in July, while silver ETF holdings remained stable. A trend of fund preference shifting from gold to silver is forming, with silver's industrial attributes and price elasticity attracting more speculative capital.

Investment Strategy: Focus on Physical Silver and Mining Stocks

For ordinary investors, allocating silver assets can consider physical silver bars, silver ETFs, or mining stocks. Physical silver bars (e.g., 1,000 oz standard bars) are currently quoted at $31.20 per ounce, offering better value than gold bars. Silver mining stocks such as Pan American Silver and Fresnillo benefit from higher silver prices, with Q2 2026 profits generally growing over 50%.

In terms of risks, watch out for a stronger dollar due to rising expectations of Fed rate hikes, and short-term impacts from phasedown of PV subsidy policies. But in the long run, the silver supply-demand imbalance is hard to resolve, and the price center's upward trend is clear.

Conclusion: Silver is transforming from "gold's follower" to "industrial upstart," and the photovoltaic revolution gives it huge demand elasticity. The silver market in the second half of 2026 deserves close attention from every precious metals investor.