In the last fifteen years, China has become the heart of the global silver market. Recently, the world saw a surge in silver selling. In January, pawn shops and jewelry stores in North America and Europe were crowded with people selling silverware, coins, and family heirlooms to take advantage of high prices.
While households were selling, China was telling a different story. The country shipped massive amounts of silver to London last year, even as its own domestic supplies hit ten year lows and refiners struggled to keep up with demand. These two trends the household seller and the industrial buyer—are linked by a major shift in how silver is used today.
Solar Power Drives Silver Demand
The rise in silver prices is largely due to solar panel manufacturing. In 2025, the solar industry used about 196 million ounces of silver. This accounts for nearly a fifth of the entire market. New solar cell designs, such as TOPCon, require even more silver than older models.
While engineers are finding ways to use less silver per panel, the sheer number of new solar installations keeps demand high. The International Energy Agency reports that the world needs to install 630 gigawatts of panels every year until 2050 to reach net zero goals. Beyond solar, electric vehicles (EVs), power grids, and AI data centers also need more silver. Meanwhile, silver mine production is falling, leading to a supply shortage that keeps prices high.
China’s Dominant Position
China is now the world’s second largest silver manufacturer. Because China dominates the global production of solar panels, its industrial policies directly impact global silver prices. When China expands its solar energy projects, it consumes massive amounts of the metal.
China also controls much of the supply. It is a leading processor of silver ore and maintains tight control over exports. Starting in January 2026, China introduced stricter licensing rules for silver exports. This move pushed global prices higher as international industries rushed to secure their supplies.
The Shanghai Futures Exchange (SHFE) is now a major indicator of the market. Inventories there are falling fast, signaling a shortage of physical metal. While some investors trade silver on paper, it is the actual availability of the physical metal that is currently setting the price.
Future Outlook for Silver
The future of silver depends on a race between technology and demand. There are two likely paths:
- The Efficiency Path: Manufacturers successfully find ways to use less silver. They might use more copper instead, or high prices might encourage people to recycle even more old jewelry and silverware. In this scenario, price pressure would ease.
- The Demand Path: Global electrification grows faster than efficiency. Solar installations continue to increase, and new technologies keep finding more uses for silver. In this case, prices stay high for the long term.
Either way, China remains the most important player. It drives demand through its massive manufacturing scale while also controlling supply through export limits and processing power.
Geopolitical Factors
Geopolitics also plays a role in silver’s value. Recently, prices dipped slightly on hopes that a meeting between world leaders in April could ease trade tensions. However, ongoing risks regarding trade policy and energy security mean that silver will likely remain a high value asset. In every scenario, China’s decisions will decide the fate of silver prices.
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