Peru's Energy Crisis Triggers Silver Surge: Supply Risks Resonate with Low Inventory Levels
On May 11, 2026, the Peruvian Presidential Palace issued Emergency Decree No. 003-2026, providing emergency bailout to state-owned oil company Petroperú, which was mired in a severe financial crisis, through a combination of national fiscal guarantees and financial innovation instruments, aiming to resolve the nationwide energy shortage and safeguard national energy security and social livelihood stability. Peru is extremely rich in mineral resources, with its gold, silver, and copper reserves ranking among the top globally. Against the backdrop of the ongoing energy crisis, some small and medium-sized mines with weaker risk resilience and projects already operating at high costs may face the risk of production cuts or even temporary shutdowns.
Silver market side, on May 11, driven by the dual forces of Peru's energy crisis and escalating Middle Eastern tensions, LBMA spot silver prices surged approximately 7.3% in a single day, touching $86.1/oz. On May 12, futures shifted into high-level consolidation and pullback, with international silver prices falling below $85, pulling back to around $84.13. China's SHFE silver inventory increased by approximately 33 mt WoW, totaling approximately 845 mt; COMEX registered warrants remained at the historical low warning level of 76.88 million ounces.
Global Mine Silver Highly Concentrated: Peru Accounts for 14% of Production, China's Import Dependency Reaches 50%
In terms of silver-bearing mineral reserves, global silver-bearing mineral reserves in 2025 stood at 610,000 mt in metal content, down 5% YoY. Among them, Peru's reserves were approximately 110,000 mt in metal content, accounting for 18% of the global total and ranking first worldwide. From a country distribution perspective, silver-bearing minerals are highly concentrated in Peru, Australia, Russia, and China, with the four countries collectively accounting for nearly 60%, indicating a relatively high concentration level.
Production side, global silver-bearing mineral production in 2025 was 26,000 mt in metal content, edging up 2% YoY. Peru's annual production was 3,600 mt in metal content, ranking second globally, accounting for 14%, up 2.56% YoY, and in recent years Peru's silver-bearing mineral production has shown a trend of gradual annual growth. The country with the highest global production was Mexico (6,300 mt in metal content, 24%), followed by China in third place (3,400 mt in metal content, 13%), also exhibiting a relatively high concentration level.
Global silver mine distribution, approximately 40% of production came from lead-zinc associated mines, 30% from copper associated mines, and 32% from gold-silver associated mines, with overall high dependence on the mining status of copper and lead-zinc mines. Although the number of silver-bearing mine projects exceeded a thousand, gold-silver mine resources were scarce, and low-grade small associated mines with annual production below 100 mt contributed approximately 60% of total production. Peru's major publicly listed firms' silver-bearing mine production, large mines accounted for only a quarter of total production. In addition, mining of high-grade silver-bearing ore in South America faced multiple constraints including policy support and social environment, resulting in poor stability of actual production operations.
China's silver concentrates imports, China's silver concentrates self-sufficiency rate was approximately 50%, with processing trade being the main trade mode for imported silver concentrates, and half of silver ore demand still relied on imports. Due to significant silver ingot processing trade with imported materials for export, silver ore import demand continued to rise. In 2025, imported silver-bearing concentrates were up 14% YoY, reaching 160,000 mt, of which Peru accounted for approximately 50%. In 2025, China's refined silver production was approximately 18,600 mt, up 5% YoY. If Peru's energy crisis further transmits to silver mine supply, it will significantly impact China's raw material supply, and the demand gap may widen further.
Overall, from the mine-side balance perspective, global mined silver reserves showed declining signals in 2025, with incremental mine production nearly stagnant. Peru dominated global mined silver supply, and small and medium-sized mines accounted for as high as 75% of its domestic projects. Meanwhile, Peru accounted for half of China's imported silver-bearing concentrates, with the supply side facing significant impact.
Outlook
Spot market, from late April to early May, the silver spot market was affected by a sharp pullback in investment demand and weakening industrial demand from PV and other sectors, with overall trading being sluggish and no significant changes in the short-term spot supply-demand pattern. Macro side, market fluctuations were more driven by sentiment factors such as the US-Iran negotiation process and the Peru crisis. This Peru energy crisis triggered more of a short-term sentiment-level reaction, and whether it can truly form a substantive impact on mine-side supply still requires close monitoring of subsequent supply dynamics of imported silver concentrates and silver-bearing lead concentrates from Peru.
