Silver Hits Record Levels as Supply From Top Producer Mexico Lags

Silver prices are trading near historic highs, while supply dynamics remain notably constrained.

According to long-term production data, Mexico — the world’s largest silver producer — is currently producing around 20% less silver than at its peak a decade ago. The divergence between rising prices and subdued output is once again drawing attention to the metal’s structural supply limitations.

The disconnect is not new, but it has become more visible as silver prices revisit levels last seen during previous commodity supercycles. Despite higher prices, mine supply has struggled to respond meaningfully, constrained by declining ore grades, permitting challenges and capital discipline across the mining sector.

From an editorial perspective, the significance lies in the broader macro backdrop. Market researchers argue that bubbles in so-called “monetary metals” rarely form when supply is tight and structural demand continues to rise—particularly during periods of stress in the global fiat monetary system.

With silver playing a dual role as both an industrial input and a monetary hedge, the current setup underscores why the market remains sensitive to even modest shifts in demand, while supply growth remains slow and uneven.

Source: industry research, historical production and price data