10 March 2026

Silver shortages: industrial demand and the physical market premium

Key insights from this briefing

What did the Perth Mint shortage show about the physical silver market?

The shortage showed that physical availability can tighten independently of paper-market benchmarks. Silver bullion was unavailable from the Perth Mint while dealer premiums remained elevated, illustrating the difference between a quoted spot price and the cost of obtaining immediately deliverable metal.

Why can physical silver trade at a premium to the quoted spot price?

When readily available bullion or industrial metal is scarce, physical buyers may pay above paper-market benchmarks. Export restrictions, tight inventories, logistics constraints and futures-market liquidation can widen the gap between quoted spot prices and the price of immediately deliverable material.

Excerpt from this briefing's Industry Insight

Silver's strategic importance is increasingly visible in the gap between financial benchmarks and physical availability. The metal has the highest electrical conductivity of any element and is heavily used in solar cells, high-reliability electrical contacts and AI infrastructure. The briefing highlighted physical shortages and elevated retail premiums in Australia even when paper prices were correcting, illustrating how futures-market moves can diverge from the cost of obtaining real metal. Strong industrial demand and constrained export channels can therefore make physical availability a separate risk from quoted spot price.

This is an excerpt from the Industry Insight in the full Market Briefing. Log in to access the complete briefing.