Fresnillo, a Mexico-based company and the world's largest primary silver producer, reported that its silver production in the first half of the year decreased by 11.4% compared to the same period last year. Production fell to 22 million ounces, according to the company.
The decline of 2.8 million ounces was attributed to two main factors. Approximately one-third of the reduction was caused by the termination of a financial production agreement known as Silverstream. The remaining portion of the decline resulted from a slowdown in mining activities due to declining ore grades in many of the company's operated mines.
Despite reporting strong profitability and financial performance, Fresnillo revised its annual capital expenditure plan downwards. However, the company maintained its 2026 production forecast in the range of 42 to 46.5 million ounces.
Global supply outlook and market dynamics
Silver production decisions are often shaped by the economic conditions of other metals rather than silver prices alone. Approximately 75% of global silver production is obtained as a byproduct of lead, zinc, copper, and gold mining.
Predicted global silver supply deficit in 2026
Industry research organizations Metals Focus and the Silver Institute predict a supply deficit of 46.3 million ounces in the global silver market in 2026. If this deficit occurs, it will mark the sixth consecutive year of supply deficits for the global silver market.
Experts suggest that silver supply tightness will continue in the short term, citing the long time required for new mine investments and the inability to increase production in existing sites at the desired speed.
