China’s Export Squeeze Ignites Silver Market Turmoil

Silber Preis XC0009653103

A strategic move by China to tighten exports of refined silver products has sent shockwaves through global supply chains and propelled prices to multi-year highs. By restricting the flow of processed metal, Beijing is leveraging its dominance over a critical bottleneck in the supply chain, placing intense pressure on Western industries reliant on this essential industrial commodity.

While China accounts for a modest portion of global mine production—approximately 13%—its real power lies further down the value chain. Market experts estimate the nation controls between 60% and 70% of worldwide silver refining and processing capacity. This positions China at a crucial juncture, as manufacturers of electronics, solar panels, and automotive components depend heavily on Chinese output for silver bars and semi-finished products.

Analysts interpret the new export restrictions as a deliberate strategy to prioritize domestic industrial needs for critical resources. Should the outflow of processed silver decline substantially, a tangible deficit could emerge on the global market, exacerbating an already tight fundamental picture.

Prices Surge on Supply Fears

The futures markets reacted violently to the news. Silver’s spot price recently peaked just below the $80 per ounce mark, closing Friday at $79.67. This represented a single-day gain of 8.54%. The weekly advance totaled 18.22%, while the metal has soared 48.20% over the past 30 trading days.

This rally has pushed silver to a fresh 52-week high of $79.67, a level roughly 69.9% above its November low of $46.90. The current price trades nearly 38% above its 50-day moving average of $57.76, indicating the market has aggressively repriced the metal in a very short timeframe.

Key Data Points:
- China's Share of Mine Output: ~13%
- China's Share of Processing/Refining: ~60–70%
- 2025 Year-to-Date Performance: Silver + >150%
- Friday Closing Price: $79.67 per ounce
- Gap from 52-Week Low: ~ +69.9%
- RSI (14-day): 62.0 – elevated, but not yet in extreme territory

The 14-day Relative Strength Index (RSI) reading of 62 suggests building momentum without signaling extreme overbought conditions. Meanwhile, the annualized 30-day volatility of 41.67% underscores a highly nervous trading environment.

Industrial Demand Meets Structural Shortfall

China’s export policy intensifies a market that has been structurally undersupplied for five consecutive years. Mine output has stagnated just as industrial consumption accelerates.

Silver has evolved from a jewelry and investment asset into a critical raw material for modern technology:
- Electric Vehicles: A typical modern EV battery and onboard electronics contain 25 to 50 grams of silver, with demand scaling alongside production volumes.
- Solar Industry: Photovoltaic panels remain among the world's largest consumers of silver.
- 5G & High-Performance Electronics: Conductive pastes and components for 5G networks and chips are heavily reliant on silver.

Against this backdrop, any constriction of supply is magnified. Western manufacturers now face potential shortages of the semi-finished products and bars that feed directly into their production lines—a scenario the market is currently pricing in.

Prominent industry voices have echoed these concerns. Tesla CEO Elon Musk remarked on the development via X, stating simply, "This is not good. Silver is needed in many industrial processes." The concise comment highlights a central truth: for future technologies, silver is not a peripheral concern but a critical input.

Physical Tightness Becomes Apparent

Even before China's latest move, signals of a tightening physical market were accumulating. Several factors point to a strained supply side:
- Exchange Inventories: Registered silver stocks in COMEX warehouses have fallen significantly since 2020, reducing the buffer available to cushion short-term demand spikes.
- Regional Premiums: Physical silver in Shanghai is currently trading at a clear premium to the international spot price. This arbitrage gap indicates scarce supply in Asia and a high willingness to pay more.
- Multi-Year Trend: The structural supply deficit is now in its fifth year, a situation dramatically sharpened by Beijing's policy.

The combination of declining stockpiles, regional price premiums, and robust industrial demand suggests the availability of physical metal could become the dominant market driver.

Price Targets and the 2026 Outlook

Given these dynamics, numerous analysts anticipate a full re-rating of the silver market in 2026. Previous conservative models have already been surpassed, and new scenarios are focusing on price regions considered ambitious just months ago.

Specifically, price targets of $100 per ounce are increasingly discussed for the first quarter of 2026. The thesis is straightforward: an artificial scarcity driven by export restrictions is colliding with unbroken demand from electromobility, solar, and electronics sectors—all within a market that has run a deficit for years.

Technical indicators, however, counsel near-term caution. The large gap above the 50-day moving average, the powerful one-month advance, and elevated volatility all point to an increased risk of a pullback in the short term. Volatility is likely to persist even as the fundamental trend remains intact.

Two factors will be decisive for the future trajectory: the precise scale of Chinese export restrictions in the coming months, and the ability of other regions to build additional refining and processing capacity. If China maintains its restrictive course and mine supply continues to stagnate, the physical availability of silver in 2026 will likely influence prices far more decisively than traditional macro factors like individual interest rate decisions.