In an assertive policy shift, China will enforce stricter controls on silver exports starting Thursday, affecting the metal's supply chains vital to the U.S. industry and defense sectors. This decision has triggered disapproval from Tesla CEO Elon Musk, who highlighted on social media platform X that silver is integral to many industrial processes.
The policy isn't entirely new, as China's Commerce Ministry initially announced these measures in October to bolster oversight on rare metals. This announcement coincided with a meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea. At that time, a temporary reprieve was agreed upon for rare earth export controls, alongside a reduction in U.S. tariffs.
Recently, China released a list of 44 companies approved to export silver under the new guidelines for 2026 and 2027, with additional constraints on tungsten and antimony exports, materials mainly controlled by China and widely used in advanced technologies.
Although an outright ban on silver exports hasn't been declared, the state-run Securities Times reported that the new policy reclassifies silver as a strategic material, aligning its export controls with those of rare earth elements. A flash survey by the EU Chamber of Commerce in China revealed that most members anticipate being impacted by these export controls.
The U.S. has recognized silver as a critical mineral due to its application in various technologies such as electrical circuits, batteries, solar cells, and medical instruments. An analysis also highlighted China’s status as one of the top silver producers in 2024, with significant exports outstripping imports.
Interest and demand for silver have surged recently. On Friday, two Chinese companies sought to purchase physical silver from Canada-based Kuya Silver at a premium, CEO David Stein told CNBC. Similar interest came from an Indian buyer soon after, indicating a competitive market shift.
A column by Tyler Cowen in The Free Press expressed that the soaring prices of silver and gold signal a potential pivot away from the U.S. dollar, which has experienced its weakest year since 2017. Conversely, silver prices have more than doubled, marking a record rise since 1979’s significant surge.
Prices briefly surpassed $80 an ounce earlier this week but have since settled around $73, highlighting ongoing volatility in the silver market.