Silver Hits $79 Record Amid China License Crackdown

By Doug Young – 28 December 2025

Introduction

Silver prices surged to a record $79.11 per ounce on December 26, 2025, driven by industrial demand pressures and anticipation of China’s new export licensing rules effective January 1, 2026.

Elon Musk’s X post highlighting a silver shortage amplified market reactions, underscoring the metal’s critical role in electric vehicles, solar panels, and electronics.

This article examines the factual developments, market data, and supply dynamics behind the rally.

Price Surge and Market Context

Record High Breakdown

Silver climbed over 10% in a single day and 48% over the past month to reach $79.11 per troy ounce, according to market data trackers.

This peak aligns with the fifth consecutive year of structural market deficits, as reported by industry analysts.

Exchange inventories, such as those at COMEX, have shown tightening availability with recent withdrawals amid rising global demand.

Historical Comparison

The 2025 high eclipses previous records, supported by year-over-year gains exceeding 169%.

Mine production remained flat at approximately 1.01 billion ounces, while demand reached 1.24 billion ounces, creating a significant imbalance.

Elon Musk’s Statement

Tweet Details

Elon Musk, CEO of Tesla and SpaceX, posted on X: “This is not good. Silver is needed in many industrial processes.”

The statement responded to reports on silver shortages linked to China’s upcoming policy changes. Tesla vehicles require 25 to 50 grams of silver per unit for battery management and electronics, while solar installations use 15 to 20 grams per panel.

Industry Implications

Musk’s comment draws attention to potential supply chain vulnerabilities in high-technology manufacturing.

Silver’s exceptional electrical conductivity—superior to copper or gold—limits substitution options without compromising performance in advanced applications.

China’s Export Policy Changes

Licensing Requirements

Effective January 1, 2026, China’s Ministry of Commerce will require export licenses for silver, applicable to companies demonstrating at least 80 tons of annual production capacity and credit lines of about $30 million.

These thresholds may disqualify smaller refiners and traders, redirecting supply toward domestic priorities through at least 2027. The measures resemble prior controls on rare earth elements and tungsten.

Global Refining Role

China processes 60% to 70% of the world’s refined silver. Any export restrictions could lead to divergent pricing: relatively stable within China and more volatile internationally, further straining global deficits.

Silver Market Fundamentals

Supply-Demand Imbalance

Analysts project a 2025 deficit of 117.6 million ounces, a slight narrowing from 148.9 million in 2024, due to stagnant mine output from aging deposits and environmental regulations.

Recycling supplies around 200 million ounces annually but cannot fully bridge the gap.

Metric	2024 Actual	2025 Forecast
Total Demand	~1.2B oz	1.24B oz
Mine Supply	~1.01B oz	Flat/Declining
Deficit	148.9M oz	117.6M oz
Industrial Share	680.5M oz	Near Record

Inventory Trends

COMEX warehouses, which track registered and eligible silver stocks, have experienced downward trends in recent months as deliveries increase.

Industrial Demand Drivers

Key Sectors

• Solar: Accounts for about 20% of silver consumption; demand grows with global installations projected at 400 gigawatts, though manufacturers pursue “thrifting” techniques to reduce usage.

• EVs and Batteries: Expands alongside electric vehicle production, expected to hit 17 million units in 2025.

• Electronics/5G/AI: Sees 20% year-over-year growth from device miniaturization and data center infrastructure.

No Easy Substitutes

Silver tops all metals in electrical and thermal conductivity, as well as optical reflectivity. Alternatives like copper reduce efficiency in high-stakes applications such as EV batteries and photovoltaic cells.

Potential Global Impacts

Supply Chain Risks

Manufacturers in the West, particularly in electronics and renewables, could face disruptions.

Limited U.S. refining capacity adds to vulnerabilities, and a potential 50% cut in Chinese exports might widen deficits by thousands of tonnes.

Mitigation Factors

Increased recycling, new mine developments, and research into silver-efficient technologies offer partial offsets, though implementation often requires 12 to 24 months.

Broader Economic Context

Strategic Metal Status

Silver’s role has shifted dramatically: industrial uses now comprise 50% to 60% of demand, up from photography and jewelry decades ago.

It underpins green energy transitions and technological advancements amid geopolitical shifts.

Monitoring Indicators

Key metrics include COMEX delivery notices, premiums on the Shanghai market, and quarterly reports from organizations like the Silver Institute. These provide ongoing insights into supply pressures and demand trends.

Discover Why Savvy Retirees are Diversifying Their Investment Portfolios With Silver