Beijing has assumed control of the world’s physical silver market 

​For decades, the price of silver has been largely determined in the trading pits of New York and London. But in 2024 and 2025, and as we embarked on 2026, a quiet revolution has upended this hierarchy. Through a combination of insatiable industrial demand, strategic arbitrage and aggressive state policy, China has effectively wrested control of the silver market, turning the “poor man’s gold” into a geopolitical strategic asset.

​Total dominance in solar PV manufacturing linked to silver appetite

​The engine driving this shift is China’s complete dominance in solar photovoltaic (PV) manufacturing. As of 2025, solar panel production consumes approximately 20% of the entire global silver supply. This figure that is rising as new “TOPCon” and “HJT” solar cell technologies require significantly more silver paste per unit than previous generations.

​China produces over 80% of the world’s solar panels. This industrial reality means that before silver can become jewellery in India or coins in the West, it must first feed the furnaces of Chinese gigafactories. This massive base layer of industrial demand allows Chinese markets to effectively set a price floor for the metal and enables them to wrestle price control away from the speculative paper trading that usually dictates global prices.

​The ‘Shanghai Premium’ and West-East drain

​A distinct financial mechanism known as the “Shanghai Premium” has accelerated this control. For much of 2024 and 2025, silver prices on the Shanghai Gold Exchange (SGE) traded significantly higher than on the COMEX (New York) or LBMA (London).

​This price gap created a lucrative arbitrage opportunity: Traders could buy physical silver in the West and sell it in the East for a virtually risk-free profit. The result has been a physical drain of silver bullion leaving Western vaults and heading to China. While Western markets trade “paper silver” (derivatives and futures contracts), China has been relentlessly accumulating the physical metal, and draining registered inventories on the COMEX to historical lows.

​Weaponising exports

​Perhaps the most aggressive move came in late 2024, when Beijing began tightening export controls on silver and other critical minerals. By restricting the export of silver ingots (high-purity bars), China is effectively forcing the world to buy finished goods (like solar panels and electronics) rather than the raw material itself.

​This moves China up the value chain and exacerbates the global supply squeeze. It signals a shift from “resource management” to “resource sovereignty,” where silver is treated not just as a commodity, but as a matter of national security essential for the green energy transition.

​The new price discovery

​The days of Western banks suppressing silver prices through short-selling are colliding with the reality of physical scarcity in the East. When short-sellers in New York attempt to drive the price down with paper contracts, Chinese state-backed entities and traders have increasingly stepped in to buy the dip, demanding physical delivery. This forces a “short squeeze,” driving prices up and breaking the traditional control mechanisms of Western financial institutions.

Beijing now controls the world’s silver

​In summary, China isn’t just mining and buying silver; it is consuming the market. By controlling the industrial demand, managing the physical stockpiles, and restricting the outflows, Beijing has made itself the number one controller of the silver world.