Silver shock: China to tighten silver exports From Jan 1 as prices hit record highs; what lies ahead

China will tighten control over the global silver trade from January 1, 2026, with the rollout of a new export licensing regime that is expected to sharply curb overseas shipments of the metal. Under the new framework, silver exporters must secure government licences, which will be issued mainly to a small pool of large, state-approved firms. The move is likely to significantly restrict the outbound supply at a time when the global silver market is already stretched.

The policy shift comes amid an extraordinary rally in silver prices. The white metal has surged about 150% this year, rising from around Rs 90,500 per kilogram at the start of 2025 to more than Rs 2.32 lakh per kilogram by year-end. Silver has comfortably outperformed gold and is on track for its strongest annual performance on record.

The rally has been fuelled by a combination of macroeconomic and market factors. Interest rate cuts and expectations of further easing by the US Federal Reserve, persistent geopolitical tensions, strong central bank buying, and rising inflows into exchange-traded funds have all supported precious metals. Shifting expectations around global monetary policy have provided an additional tailwind throughout the year.

China's silver export policy

China’s new export rules carry far-reaching implications for international markets. The country accounts for roughly 65% of globally traded refined silver, and an estimated 60%–70% of that supply will now require explicit approval from Beijing before it can leave the country. The global silver market has been running a structural deficit for nearly five years, leaving inventories thin and prices highly sensitive to supply shocks. In anticipation of tighter controls, both industrial users and investors have been rushing to secure physical metal.

China was the world’s second-largest silver producer in 2024, with output of about 3,300 metric tonnes, representing roughly 13% of global production. Mining activity is spread across provinces such as Henan, Jiangxi and Yunnan, with most silver produced as a byproduct of lead, zinc and copper mining rather than from primary silver mines. The Silvercorp Ying complex remains the country’s largest primary silver operation. However, China’s influence extends well beyond mining, as it dominates refining, processing and export flows, giving it disproportionate control over global supply chains.

Global ripples

The planned restrictions have triggered concern overseas. Tesla CEO Elon Musk criticised the move on social media platform X, highlighting silver’s critical role in industrial applications. The metal is widely used in electronics, batteries, solar panels, medical instruments and defence equipment.

The licensing regime itself is not entirely new. According to CNBC, China’s Commerce Ministry first outlined the measures in October 2025 as part of broader efforts to tighten oversight of strategic materials. The announcement coincided with a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea, when Beijing agreed to pause certain rare earth export controls while the US eased some tariffs.

Earlier this month, Chinese authorities named 44 companies approved to export silver under the new rules in 2026 and 2027. The framework also tightens controls on tungsten and antimony, two materials dominated by China’s supply chain and critical to defence and advanced technologies, according to a report in Marketwatch. While there is no outright export ban, state-run Securities Times cited an industry insider saying the policy effectively elevates silver to the status of a strategic material, placing it alongside rare earths.

The US has already added silver to its list of critical minerals. Official data show China exported more than 4,600 tonnes of silver in the first 11 months of the year, compared with imports of about 220 tonnes. Earlier this year, the London silver market also faced a sharp squeeze as ETF inflows and shipments to India drained already low inventories. Against this backdrop, China’s decision highlights how control over key metals is becoming central to industrial strategy, energy security and geopolitics.