China’s January 1 silver curbs to deepen global crunch, analysts warn amid volatility

China’s move to restrict silver exports is set to keep the metal in the spotlight, with analysts warning of a supply crunch following weeks of volatile price swings.\nEffective Thursday, the Ministry of Commerce will implement a two-year special government licence for exports of silver, along with tungsten and antimony. While Beijing says the measure is aimed at protecting resources and the environment, market watchers see it as a signal that supply to overseas markets will be further limited.\nThe new rules replace a quota system in place since 2000. Under the stricter regime, exporters must meet rigorous standards: firms need to prove they executed silver exports annually from 2022 to 2024, while new applicants must demonstrate annual production exceeding 80 tonnes and consistent export records.\n“Compared with gold, silver has delivered a markedly stronger performance,” said Antonio Di Giacomo, senior market analyst at global multi-asset broker XS.com, noting that the divergence between gold and silver reflects the latter’s hybrid nature.\n“It acts as a safe-haven asset during periods of uncertainty while also benefiting directly from industrial and technological expansion, which explains its relatively higher volatility,” he added.\nSpot silver briefly surpassed US$80 an ounce for the first time this month before retreating to the US$70 range.\nWhile the approach can help secure silver in China, it could affect access to the metal for firms and investors outside the country\nJoseph Dahrieh, Tickmill\nZeng Ke, an analyst at Hualian Futures, said in a report on Sunday that the London silver and Shanghai silver prices recorded an accumulated surge of 175 per cent and 145 per cent, respectively, throughout 2025.\nJoseph Dahrieh, managing principal at multi-asset broker Tickmill in London, said the licence system could add significant friction to the process of exporting silver, even though it is not an “outright ban”.\n“The Ministry of Commerce’s December 12 review shows 44 firms qualified for exports in 2026-27, concentrating export rights and adding approval friction,” he explained. “While the approach can help secure silver in China, it could affect access to the metal for firms and investors outside the country.”\nThe restrictions come as the United States – a major importer of silver – looks to secure supplies, which are widely used in photovoltaic, artificial intelligence and electric vehicle (EV) manufacturing. China is a key producer with strong refining and processing capacities. The US government officially added silver, along with copper, to its critical-minerals list in November, reflecting strategic importance to the country’s economy and national security.\nOn Saturday, in response to China’s upcoming restrictions on silver exports, billionaire Elon Musk said on social media: “This is not good. Silver is needed in many industrial processes.”\n\nThis is not good. Silver is needed in many industrial processes.\n— Elon Musk (@elonmusk) December 27, 2025\n\nAlicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis, said the licence requirement aims to ensure China’s domestic needs for solar and EVs are met.\n“Silver exports to the US and Europe have been falling already for quite some time, so it’s only going to get worse,” she added. As evidence of the divergence, she pointed to what is known as the “Shanghai premium” – currently US$5 to US$10 per ounce over the Commodity Exchange (Comex), which is the primary US futures and options exchange for trading precious and base metals.\nDahrieh said this premium reflects the supply squeeze as available inventory remains tied in the US. Tighter export controls, he explained, could create more availability in China and push prices down locally while driving them up outside of China.\nIn addition to “disruptions” brought by the export controls, Garcia-Herrero noted that the price of silver could hit US$100 an ounce if China applies the licence requirement “very tightly”.\nHowever, risks remain for silver. Analysts say potential US tariffs, shifting real interest rates, the dollar’s strength, and the resilience of global industrial growth could complicate the market in 2026.\n“It has to be cautioned that pressures from technological substitution and the potential implementation of tariffs will affect the silver price,” said Xu Shiwei, an analyst at China Merchants Futures, in a December 18 report.\nXu noted that traders moved inventory from London to New York in 2025, ahead of possible “high tariffs” and due to robust overseas demand driving up prices.\nDespite the headwinds, the outlook remains bullish for some. Di Giacomo at XS.com said silver was being positioned “as a key protagonist heading into 2026”.\n“Silver is not only reaching record highs but also redefining its role within the commodities market,” he said. “While volatility is likely to persist, the broader picture suggests the current move reflects a regime shift rather than a fleeting rally.”\n