Silver prices are soaring as a massive global supply crunch unfolds. The physical market is struggling to meet surging demand, and China’s latest move has intensified the storm.
From January 1, 2026, China will impose strict export controls on silver. Only large, state-approved producers with at least 80 tonnes of annual output and $30 million credit lines will get licences. Smaller exporters are effectively shut out. Since China controls nearly 60–70% of world supply, these rules instantly tighten the global market, similar to its rare earths strategy.
The silver market was already in structural deficit for five consecutive years. In 2025, global demand stood at 1.24 billion ounces versus just 1.01 billion ounces of supply—a gap exceeding 200 million ounces. Mining output is stagnating as most silver comes as a by-product of copper and zinc production.
Inventories are plunging sharply COMEX down 70% since 2020, London vaults down 40%, and Shanghai at decade lows. Physical silver in China now trades above $80/oz, far higher than paper prices, highlighting a 356:1 paper-to-physical ratio.Industrial demand from solar, EVs, electronics, and healthcare continues to surge. With supply squeezed and inventories dwindling, silver’s rally is driven not by speculation but by an unfolding physical shortage worldwide.
