Why Silver Has Exploded: Supply Shocks, China’s Export Pullback, and Surging Demand
Here are three main reasons silver has roughly tripled in price over the last year, incorporating the impact of China’s export changes:
1. Tight global supply and China’s export restrictions
China, historically one of the largest sources of silver supply, has moved to significantly restrict silver exports, introducing mandatory licensing and effectively reducing outbound flows of silver bullion. This policy shift limits the amount of silver available on global markets just as demand remains strong, tightening global supply and putting upward pressure on prices. Analysts estimate this could constrain 60–70% of silver that historically flowed from Chinese mining operations, creating a pronounced supply squeeze.
2. Elevated investor demand – safe haven and speculative positioning
Amid macroeconomic uncertainty, geopolitical tensions, and expectations of future monetary easing (e.g., potential U.S. interest-rate cuts), investors have increased allocations to silver as a safe-haven asset and speculative play. Silver often rallies alongside gold in risk-off environments, and this year saw record inflows into silver ETFs and futures contracts.
3. Strong industrial and structural demand
Silver’s role as a critical industrial metal—especially in solar photovoltaics, electronics, EVs, and tech applications—has driven structural demand growth that continues to outpace supply. Global manufacturing and clean-energy buildouts have pushed consumption higher, contributing to an ongoing supply deficit. Investors and manufacturers alike are securing supply ahead of anticipated shortages. (Wikipedia)
Summary:
• China’s export pullback and supply tightening has removed a large chunk of tradable silver from international markets, intensifying the deficit.
• Safe-haven/speculative flows have boosted demand amid economic uncertainty.
• Industrial consumption growth continues to outstrip production, reinforcing long-term bullish fundamentals. (Wikipedia)