Silver’s Stunning 2025 Rally Meets a New Era of Chinese Control
By Peter Kennedy
China has moved to tighten control over silver exports, introducing a new licensing regime that signals a significant shift in how the metal is treated within its industrial and strategic policy framework.
Effective January 1, 2026, China’s Ministry of Commerce will require exporters of silver to obtain a special government licence valid for two years. The measure replaces a quota system that has been in place since 2000 and brings silver under a regulatory structure similar to that already applied to other strategically sensitive materials such as tungsten and antimony.
While Chinese authorities describe the policy as a step to protect domestic resources and reduce environmental pressure, market participants view it as a clear signal that outbound supply will be more tightly managed. Analysts estimate that as much as 70% of globally traded mined silver passes through China at some stage of processing or export, meaning the new rules could materially affect availability in international markets.
Under the revised framework, exporters must meet stricter qualification standards. Existing exporters are required to demonstrate a consistent record of silver exports between 2022 and 2024, while new applicants must prove annual production capacity of at least 80 tonnes alongside verifiable export experience. China has published a list of 44 companies approved to export silver under the new system for 2026 and 2027, sharply narrowing the pool of eligible suppliers.
The policy change comes amid a period of extraordinary price performance. Silver outpaced gold in 2025, driven by a combination of strong investment flows and structurally rising industrial demand. Prices climbed from roughly US$29 an ounce at the start of the year to a peak of US$79 an ounce on Boxing Day, before easing modestly to around US$74 an ounce by year end. While speculative momentum played a role, analysts increasingly point to supply rigidity as a core driver of the rally.
Unlike many primary commodities, silver supply is inherently inelastic. Up to 80% of global production is generated as a byproduct of mining for copper, lead, zinc, and gold, limiting the industry’s ability to respond quickly to higher prices through new standalone silver projects. As a result, policy-induced constraints can have an outsized impact on market balance.
Demand growth has been led by industrial applications, particularly in solar photovoltaics, electronics, and electric vehicles. Silver’s high electrical conductivity makes it difficult to substitute in key components, and rising EV adoption is increasing usage not only in vehicles themselves but also across the expanding charging infrastructure required to support them.
Taken together, China’s licensing regime and the metal’s strong demand trajectory suggest that silver is no longer treated merely as a precious or monetary metal. Instead, it is increasingly viewed through the lens of industrial security and supply chain resilience—a shift that may have lasting implications for pricing, investment strategies, and the development of non-Chinese sources of supply.