China’s newly implemented rules replace a quota-based regime in place since 2000 with a stringent export-licensing system. Only 44 large, state-approved entities, each with annual production above 80 tonnes and substantial financial reserves, are allowed to export silver. This policy culls hundreds of smaller independent exporters, many of whom are key suppliers to silver refiners and industrial users worldwide.
While Beijing frames the move in environmental and strategic terms, market analysts have a more candid interpretation: this is textbook resource nationalism. Echoing prior clampdowns on rare earths and other critical minerals, the silver controls allow China to prioritize domestic supply, concentrate pricing power, and wield significant influence over Western efforts to advance in AI, solar, electric vehicles, and defense technology, all sectors that rely heavily on silver.
The timing could hardly be more consequential. Even before the new policy, the silver market was experiencing a chronic structural deficit. Global demand has outpaced supply for four consecutive years, with the shortfall in 2024 reaching nearly 149 million ounces. Total multi-year deficits now surpass 678 million ounces, equivalent to 10 months of global mine output.
Silver demand is on a relentless upward trajectory. The solar sector now consumes over 200 million ounces annually, a figure set to more than double by 20, while AI infrastructure and electric vehicle (EV) manufacturing add additional pressure. The result? An incredibly tight, inelastic market that was not prepared for further supply-side stress.“Silver is no longer just an industrial metal,” says Charlie Garcia, founder of R360. “It’s a strategic asset, and China has just weaponized it.”
In the run-up to the new controls, international silver prices surged past $80 per ounce, a dramatic climb from under $35 just a year ago. London traders saw sharp intraday volatility, exacerbated by a preemptive scramble from funds and institutions to secure exposure before the gate slammed shut.
Analysts across UK brokerages now largely agree that silver is entering a “higher for longer” phase. Prices may fluctuate, but the new average base is elevated and driven as much by geopolitics as economics.“Geopolitical risk must now be priced into every ounce of silver,” notes a commodities strategist at a leading UK asset manager. “The UK investor has to think beyond price charts and start monitoring China’s Ministry of Commerce.”
In addition to price impacts, the controls are likely to affect availability. Smaller refiners and industrial users who relied on independent Chinese exporters are now scrabbling for alternative sources that could squeeze physical supplies in London and Europe.
Although China is only the second-largest silver miner globally, it holds a near-monopoly on refining. Between 60% and 70% of the refined silver traded globally originates from Chinese facilities. According to the London Bullion Market Association, China is home to 27 accredited silver refineries, more than double the number in Japan, the runner-up.
China’s dominance is by design. The country runs a vertically integrated silver industry, importing ore and concentrates, refining them domestically, and exporting finished bullion. In 2025 alone, it exported 4,600 tonnes of silv, dwarfing the 220 tonnes it imported. This refining capacity makes China the gatekeeper of the global silver supply chain, akin to its years-long stranglehold on the rare earths market. With the new controls, it now decides what leaves the country, how fast, and at what price.
Frank Giustra’s comparison to China’s historical relationship with silver is instructive. From the 1500s until the 1800s, China absorbed up to 50% of global silver output, underpinning its monetary system. The British trade imbalance eventually paved the way for war and colonization, a chapter known in China as the “Century of Humiliation.”
Today, the tables are turned. With commanding industrial demand, control over refining, and a global dependency on Chinese silver, the Middle Kingdom is not defending itself against foreign intrusions; it’s shaping global market outcomes from a position of power. “Beijing has stood, and it’s not sitting back down,” says Giustra. “This move is one of economic sovereignty, not desperation.”
Not all voices are unanimously bullish. Some believe that sustained high prices will inevitably trigger new mine development, better recycling practices, and even substitution, particularly in solar. But these are long-term remedies. Mining new silver takes upwards of a decade. And since over 70% of global silver production is a by-product of base metal mining, higher silver prices alone won’t move the needle unless copper, lead, or gold prices also rise in tandem.
In the meantime, the squeeze is real and worsening. Physical premiums in Asia reached $10–14 above spot prices in December 2025, while backwardation in the London OTC market, where near-term contracts trade at a premium to futures, signals frantic physical demand. BIS-reported vault holdings in London have dropped dramatically, and massive short positions were exposed during the October 2025 silver squeeze, when lease rates spiked to 40%.
Interestingly, China’s retail investors have also shown a newfound love for silver. As gold prices climbed out of reach, silver became a more volatile but affordable alternative for millions of Chinese savers. In the final days of 2025, bullion markets in Shenzhen saw lines of retail buyers, with silver bars and jewelry flying off the shelves.
While retail enthusiasm can fade as quickly as it builds, the renewed interest adds another unpredictable layer of demand atop an already constrained supply structure. If the retail frenzy continues, it could further challenge global allocations, especially if rising premiums and export delays discourage shipments abroad.
The narrative around silver has shifted irrevocably. It is now entangled in international politics, defense strategy, and the energy transition. The U.S. has already designated silver a “critical mineral,” underscoring its strategic importance in tech and military applications. And Beijing has just made clear that access to it will come with a condition or not at all.“There’s an argument for keeping metal in your possession,” concludes Garcia. “No counterparty risk. No margin calls. Just silver, sitting there, appreciating while bureaucrats in Beijing shuffle export applications into the ‘pending’ pile.”
As the geopolitical landscape grows more fractured and the clean-energy economy accelerates, the metal once considered “poor man’s gold” is reclaiming a central role in global finance and power dynamics. Silver isn’t just a hedge anymore. It’s a frontline player in an unfolding global contest over resources, sovereignty, and the future of technology. And that makes it one of the most strategically important and potentially explosive assets of 2026.