China’s silver export license requirements take effect
China's new silver export licensing requirements are unnerving investors – but we think markets are overreacting.
A quick recap: In October, the commerce ministry (MofCom) suspended silver (and phosphate) export quotas for a third consecutive year, but introduced new export license requirements, effective January 1, requiring exporters to secure approval for overseas shipments.
- This wasn't a geopolitically retaliatory move, nor was it tied to China's dual-use export control regime.
- Instead, these licenses are intended to conserve scarce strategic resources for domestic use.
Cue the freakout: Silver is an essential input for semiconductors, solar panels, NEV batteries, advanced optics, sensors, and more.
- When Elon Musk weighed in on social media, the issue went viral – pushing elevated silver prices into the stratosphere.
Why we're not panicking:
- China's share of the global silver market is limited, just ~13% of global extraction and ~23% of globally traded supply. That's well below its dominant share in rare earth elements (REEs) and the other critical minerals on our watchlist.
- The US isn't meaningfully dependent on China for silver – it sources most from Mexico and Canada.
- When MofCom updated its (separate, long-standing) list of qualified silver exporters in late December, 44 firms were approved – two more than in 2025.
That said, those 44 firms now face an additional licensing step.
- Even without quotas or national security scrutiny, licensing adds friction and higher costs for exporters and their customers.
The bottom line: Without dominance in mining or processing, Beijing lacks the leverage to weaponize silver for geopolitical gain.
What to watch: If silver prices keep spiking or shortages emerge, MofCom won't hesitate to throttle exports to protect domestic supply.