Today's Edition
BATOOL GHAITH (ABU DHABI)
In a move that has sent shockwaves through global commodities markets, China has imposed new export controls on refined silver, officially classifying the metal as a strategic resource subject to licensing.
This regulatory shift, which took effect on January 1, 2026, grants China tight control over who can export silver and how much of it leaves the country. Under the new rules, only state-approved companies can export silver, effectively ending decades of free-market exports.
According to experts, this regulatory gatekeeping is expected to trigger a global supply shock, as China is estimated to control around 60–70% of the world’s refined silver production.
Economic analyst Hosam Ayesh noted that these restrictions are poised to tighten international silver supplies and intensify volatility in global markets.
With China being a key global player in refined silver production and trade, Ayesh emphasised that the new licensing system will significantly influence the availability of silver to international buyers.
“Beijing is likely prioritising domestic industrial use—including renewable energy, electric vehicle manufacturing, and high-tech industries—over exports. This development could result in silver becoming more expensive and harder to secure for countries that traditionally rely on Chinese exports,” Ayesh told Aletihad in an interview.
He also highlighted that silver’s value lies not only in its use as a financial investment, but also as a critical input in green technologies, including solar panels and electric vehicles. Consequently, China’s move could give it an edge in strategic industries by ensuring that it retains enough domestic supply to meet future demand, particularly in sectors vital to energy transition and digital infrastructure.
While the jewelry market might not experience an immediate or severe impact, Ayesh noted that rising silver prices could eventually trickle down to consumers, especially in regions like Asia and the Middle East where silver jewelry is in high demand.
“If spot prices continue to climb, retailers may pass those increases on to customers, potentially leading to a drop in sales due to price sensitivity in these markets,” he said.
According to Ryan Lemand, Co-Founder of Neovision Wealth, China currently dominates the refined silver supply traded internationally, accounting for an estimated 60–70% of the global export market. He highlighted that only 44 companies have been granted permission to export silver during 2026–2027 under the new licensing regime.
These companies were selected based on criteria such as production capacity and historical export activity, a clear signal that Beijing is tightening control and enforcing the prioritisation of domestic needs.
“By elevating silver to the status of a strategic resource, China is effectively reshaping global silver dynamics. As a result, global supply chains are already adjusting, and silver prices surged to record highs in late 2025, reflecting the market’s anxiety over future availability,” Lemand told Aletihad.
Lemand explained that the impact is not limited to physical supply; it also extends to trading behaviour. Futures markets have shown heightened volatility, with increased speculative activity and shifting forward curves as traders hedge against the risk of further disruptions.
“The change from a relatively open trade system to a controlled, licensed model has increased uncertainty, prompting investors to respond with precautionary positioning,” Lemand said.
For countries dependent on Chinese silver imports, the challenges are immediate and strategic. Manufacturers of solar panels, medical devices, electronics, and electric vehicles will need to re-evaluate sourcing strategies. “Some may face shortfalls or delays in procurement, while others may seek alternatives in countries like Mexico, Peru, or Russia,” he added.
In financial markets, Lemand expects Q1 2026 to be particularly turbulent for silver futures and ETFs. “Traders are likely to face increased margin requirements and sharper price movements, while ETF inflows may rise as investors seek safe exposure to a critical industrial metal in short supply,” he said.
As of today, silver is trading around $76 per ounce, up sharply from levels near $29–30 per ounce at the start of 2025—representing an increase of roughly 150–160% over the year. Despite the increase in prices, demand has been increasing dramatically as well, according to retailers.
“I sell approximately 20 kilogrammes of silver daily. People are buying silver as a safe-haven asset instead of gold,” Mohammad Saqer, a gold and silver retailer, told Aletihad. He said that people are buying large amounts of silver in the form of coins, ounces, and bullion.
“People call me to reserve amounts of silver beforehand. Lately, I sell out whatever I have within hours,” Saqer said.
Saqer noted that his supply comes primarily from Swiss and Emirati sources. “Even though I do not import directly from China, the whole market is tightening. Silver from other sources is getting more expensive because demand is shifting; everyone is trying to secure alternatives now, and that drives prices up everywhere.”
