In late 2025, the silver market reached unprecedented heights, both in terms of price and structural dysfunction. With spot prices soaring above $53 per troy ounce, a 76.92% year-over-year increase, and industrial and geopolitical demand eroding available stockpiles, the supply chain for physical silver has fractured. What appeared on the surface to be a triumphant bull market quickly devolved into a liquidity crisis unseen in modern history, upending refining economics, shattering just-in-time financing models, and leaving both institutional and retail sellers stranded in what is now being called the “Silver Freeze.”
The surge in silver prices throughout 2025 is not simply a cyclical upswing. It signifies a fundamental repricing of silver's role in the global economic and industrial matrix. Historically, silver has occupied the dual mantle of both precious and industrial metal. In 2025, both these identities have become materially relevant. From November 2024 to November 2025, silver's price jumped from $973.47 to $1,692.02 per kilogram, equating to a leap from around $30 to over $53 per ounce. Amid inflationary pressures, economic destabilization, and central bank interventions, there was a flight to hard assets. Sovereign wealth funds, especially from the BRICS nations, began accumulating silver both in physical form and through ETFs, marking a shift from gold-exclusive reserve strategies and draining Western vaults of commercial-grade bars.
Furthermore, the persistence of an elevated gold-silver ratio (GSR), floating between 75 and 80 despite silver’s performance, pointed to a lingering undervaluation. In monetary terms, silver remained a coiled spring, and the prospect of further gains encouraged hoarding, tightening an already strained market.
While macroeconomic forces provided the floor for price gains, industrial applications, specifically renewables and electrification, supplied the rocket fuel. The solar photovoltaic (PV) sector emerged as the dominant force in 2025. Technological shifts toward TOPCon and HJT panels increased silver’s per-unit demand by over 120% compared to earlier technologies. These panels, swallowing metal at an unprecedented pace, found no substitutions. Attempts to thrift with copper failed due to performance constraints, leaving solar manufacturers forced inelastically buy silver at any cost.
Parallel trends in the electric vehicle and telecommunications infrastructure sectors compounded demand. As a result, 2025 marked the fifth consecutive year of a global silver deficit. Mine supply growth stagnated, dogged by the fact that most silver is a byproduct of base metal mining industries that are not responsive to silver price incentives. The industry was forced to cannibalize above-ground stockpiles, which by late 2025 had thinned to critical lows.
The most visible rupture in late 2025 was the collapse of the silver lease market, which underpinned the refining industry.
Lease rates were typically negligible at 0.25% to 2% spiked violently in October, peaking at over 125% for some intraday transactions. Silver refiners, who lease metal to hedge price risk during processing, were suddenly underwater. Holding metal for 30 days at a 100% annualized lease rate costs over 8% well in excess of the razor-thin processing margins of 1–2%. Refiners could no longer afford to operate. The result was a complete halt in wholesale secondary market purchasing.
This freeze cascaded through the ecosystem. Refiners refused incoming scrap. Aggregators had nowhere to offload inventory. Local coin shops, once the first point of liquidation for retail metal holders, were left adrift. A vast bifurcation appeared between soaring spot prices and a physical market where no buyer would touch sterling silver or industrial scrap. Backwardation, a rare condition where spot prices are higher than futures, signaled a desperate global quest for immediate delivery. Logistics and geopolitical friction only deepened the problem. Silver sitting in COMEX warehouses couldn’t be moved to London due to spiraling shipping costs and fears of retaliatory tariffs as economic nationalism reared its head.
The freeze humbled even the titans of the industry. Jack Hunt Coin Broker, a major sterling buyer, suspended all low-grade silver purchases, citing an inability to procure refining slots. In November 2025, they projected no reopening for sterling acquisitions until 2026. Elemetal and SD Bullion likewise scaled back operations, rationing intake and constraining purchasing volumes. Regional aggregators once flush with free-flowing credit lines found their terms slashed or terminated, with refiners offering little or no advancement payments. Long-standing "margin fronting" relationships crumbled.
At the retail level, local coin shops were trapped. Without an exit channel for purchased metal, they either shut down buying entirely or offered insultingly low prices, sometimes 50% of melt value for sterling items like flatware and serving trays. Anecdotal accounts on Reddit and specialty forums were rife with customer outrage.
The Silver Liquidity Crisis of 2025 is not a symmetrical price surge. It is a rupture in structure: a breakdown of the mechanisms that allow price discovery to transmit through to physical reality. While the paper price of silver prints ever higher, the hands that hold the actual metal find themselves stuck, unable to convert solid assets into cash without taking grotesque discounts.
But amid this dislocation lies clarity. The fragility of middlemen, the danger of endless leverage, and the value of vertical integration now command new reverence. Amid a market freeze, Phoenix Refining is still actively buying silver.