Record industrial demand, supply deficits, and new U.S. policy changes now place silver at the center of modern manufacturing.

May 15, 2026 While the silver market has long assumed a massive supply deficit and sharply rising prices, the major Swiss bank UBS is now significantly revising its forecasts for the precious metal downward. The reason: According to analysts, weaker underlying demand is being offset by rising mine production. The supply gap is shrinking dramatically At the heart of the reassessment is the adjustment of the expected market deficit. While UBS had previously assumed a supply gap of 300 million ounces for 2026, this shortfall has shrunk to just 60 to 70 million ounces in the current estimate. This decline results from two opposing trends. On the supply side, the bank sees a more favorable environment and expects global mine production to rise to around 850 million ounces of silver by 2026. At the same time, high silver prices are putting the brakes on consumption. In the photovoltaic, silverware, and jewelry sectors alone, the bank anticipates an aggregate loss in demand of about 50 million ounces. Investors are pulling back Consequently, investment demand is also declining noticeably. Analysts have cut their estimate for the full year from over 400 million to 300 million ounces—a figure that UBS still describes as “generous” in light of recent market movements. Current data supports this skepticism: Global ETF holdings have fallen by nearly 70 million ounces to around 794 million ounces. At the same time, the net positioning of speculative futures investors has retreated to just over 100 million ounces. Silver is thus losing momentum simultaneously in industrial applications and investment vehicles. The New Price Targets: Sideways Instead of a Steep Rise Against this backdrop, the upside potential is diminishing, according to UBS. In the base scenario, the strategists no longer expect a steep upward trend, but rather a broad sideways movement—albeit at a high level. The price targets have been capped accordingly across all time frames: End of Q2 2026: $85 per ounce (previously $100) September 2026: $85 (previously $95) End of 2026: $80 (previously $85) March 2027: $75 (previously $85) Gold as an Anchor and New Trading Strategy Despite the subdued outlook, the Swiss bank does not expect a sharp drop in silver prices. Gold acts as a stabilizer: Analysts continue to anticipate a general upward trend in prices for the yellow metal. Given the recently renewed correlation between the two metals, this also provides a downside hedge for silver. According to the bank, the gold-silver ratio is expected to stabilize in the range of 75 to 80 in the medium term. From the perspective of UBS strategists, selling downside risks to generate returns is currently more attractive than building pure long positions. While implied volatility has calmed down since the extremes seen at the start of the year (in February, realized one-month volatility was nearly 150%), it remains at a high level from a historical perspective. The bank therefore favors strategies for the coming three months that capitalize on this volatility rather than betting directly on further rising silver prices. Source： https://goldinvest.de/en/silver-under-scrutiny-why-analysts-are-lowering-their-forecasts

[SMM Aluminum Express News] Rio Tinto reported Q1 2026 aluminum output of 835,000 tons (+1% YoY), supported by stronger alumina production despite lower bauxite due to weather disruptions in Australia, including Tropical Cyclone Narelle impacts. The company also highlighted tighter global aluminum supply as the Middle East conflict removes ex-China output, contributing to a more pronounced market deficit outlook for 2026. Operationally, alumina strengthened after full ownership of Queensland Alumina Limited, while Kitimat ramped up in Canada, NZAS remained stable, and the AP60 project achieved first hot metal.

The global aluminum market is currently characterized by a distinct divergence between Chinese and overseas markets. Overseas markets have performed strongly amid supply-side disruptions, while the domestic market has also strengthened due to similar supply disturbances but remained relatively weak compared with the LME. Details on supply, demand, trade and market structure are as follows: I. Overseas Aluminum Market: Prominent Supply Tightness and Sustained Pressure on Inventories The core contradiction in overseas aluminum markets lies in supply contraction and low inventory levels, exacerbated by geopolitical conflicts, further intensifying supply tightness. In terms of LME inventory data, current inventories remain on a continuous downward trend, greatly weakening their supportive role in the market. Historically and recently, LME cancelled warrants peaked at 178,000 tonnes earlier, accounting for 39% of total inventory. As a result, the effectively available LME inventory has dropped to its lowest level since May 2025, further highlighting tight overseas supply. Supply contraction has widened the market deficit, with production cuts at two key projects—EGA and Alba—having a particularly significant impact.On March 28, EGA’s Al Taweelah smelter in the UAE and Alba’s plant in Bahrain were attacked, causing equipment damage and sharply raising risks of capacity disruptions. This came on top of earlier disruptions: March 15: Alba reduced output at three production lines due to shipping disruptions in the Strait of Hormuz; March 12: Qatar’s Qatalum smelter suspended 40% of capacity due to natural gas supply cuts. Overseas primary aluminum supply deficits are expected to continue widening. Meanwhile, high energy costs in Europe have also reduced local semi-fabricated aluminum output, further tightening supply. Supply tightness has directly driven a sharp rise in overseas spot premiums. Amid supply concerns from escalating Middle East geopolitical conflicts, the Q2 MJP premium rose by approximately USD 156.5/t to USD 351.5/t. Specifically, major regional premiums rose markedly at end-March: CIF South Korea: from USD 168/t (early March) to USD 292/t; CIF Thailand: from USD 183/t to USD 317/t; European Duty Unpaid: from USD 345/t to USD 400/t; US Midwest DDP: from 103.75 cents/lb to 105.5 cents/lb. This fully reflects that expectations of tight primary aluminum supply have enabled sellers to push up quotations. Downstream demand and purchasing patterns vary significantly across regions: South Korea: Phase-wise restocking completed; weak downstream restocking sentiment, limited demand support. Southeast Asia: Dominated by term contract execution with limited spot restocking; insufficient incremental buying momentum. Europe: Rising supply shortage concerns amid production cuts in Qatar and Bahrain; downstream restocking underway, relatively strong demand. United States: Low inventories entering a restocking cycle, providing moderate market support. II. Chinese Aluminum Market: High Inventory Pressure, Weak and Constrained Demand In contrast to strong overseas markets, the domestic aluminum market has strengthened amid supply disruptions but underperformed relative to the LME, characterized by high inventories and constrained demand. High domestic aluminum prices have continued to suppress downstream purchasing. Current buying is mainly order-based rigid demand, with low willingness for active restocking, providing limited upward support. Domestic inventory pressure has not eased effectively: primary aluminum inventories remain elevated, and inventory destocking has progressed slower than expected, likely prolonging the digestion period.High inventories and high prices form dual constraints. Although the domestic market has upward momentum, it is weaker than overseas. Domestic spot premiums are expected to remain under pressure and further widen in the short term.

Middle East tensions have sparked a massive steel trade "mismatch." Iran's blocked exports created a 2.3-million-ton billet vacuum in Southeast Asia, while the Red Sea crisis stalled China's flat steel shipments to the Gulf. Consequently, China and India are rapidly absorbing SEA's diverted billet orders. SMM projects that blocked flat steel returning to China's domestic market, combined with surging overseas billet demand, will accelerate the narrowing of the domestic HRC-rebar spread.

UBS has significantly raised its copper price outlook in a recent report, increasing its long-term price forecast by $500 per metric ton. The bank now expects copper prices to reach $15,000 per metric ton by the end of March 2027. It maintains a positive view on the copper market and advises investors to hold long positions. At the same time, UBS has updated its supply and demand forecasts. It has slightly lowered its 2025 copper market deficit projection to 200,000 metric tons but sharply raised its 2026 deficit estimate from 407,000 to 520,000 metric tons. The bank believes this widening supply gap will support elevated copper prices through 2026.