BEIJING / NEW YORK – Global financial markets were sent into a tailspin this week as silver prices shattered the psychological $90 per ounce barrier, a historic peak triggered by China’s sudden reclassification of the metal as a "strategic dual-use material." The move, announced by China’s Ministry of Commerce (MOFCOM), effectively places silver under a strict export licensing regime similar to those recently imposed on gallium and antimony. By designating silver as critical for both civilian and national security interests, Beijing has fundamentally altered the landscape for a metal that has, until now, been traded primarily as a financial asset or jewelry component.
The immediate implications are profound: a desperate scramble for physical bullion has paralyzed several industrial supply chains, particularly in the high-growth sectors of artificial intelligence and renewable energy. With China controlling over 50% of the world’s silver refining capacity and serving as a primary hub for PV cell manufacturing, the export restrictions have created an overnight liquidity crisis in the physical silver market. Analysts warn that the $100 mark is now within reach as Western manufacturers face the prospect of a "silver famine" heading into the second half of 2026.
A Perfect Storm: Five Years of Deficits and a Sudden Export Ban
The surge to $90/oz is not merely a reaction to a single policy change but the culmination of a decade-long structural imbalance. For the fifth consecutive year, the global silver market has entered 2026 in a massive supply deficit. According to the Silver Institute, the cumulative shortfall since 2021 has now exceeded 900 million ounces—nearly a full year’s worth of global mine production. Inventories at major warehouses, including the COMEX and the London Bullion Market Association (LBMA), have been drained to their lowest levels in forty years, leaving the market highly susceptible to the supply shock delivered by Beijing this week.
The timeline of this crisis accelerated in late 2025 when Chinese officials began hinting at "resource security measures" intended to protect domestic high-tech manufacturing. On Monday, the official directive was issued: all silver exports now require a specialized "dual-use" license, and a "State Trading" whitelist has been established, limiting authorized exporters to just 40 state-sanctioned firms. Market participants were caught off guard by the speed of the implementation. "We expected some tightening, but a wholesale reclassification of silver as a defense-critical material is the nuclear option," said one senior commodities trader in London. Initial market reactions saw silver futures jump 15% in a single trading session, with the "silver-gold ratio" narrowing to its tightest levels since the early 1980s.
Industrial Heavyweights and Mining Giants: Winners and Losers
The fallout from $90 silver is creating a sharp divide between those who extract the metal and those who consume it. Primary silver miners have seen their valuations skyrocket as investors bet on sustained high prices. Hecla Mining (NYSE: HL) and Pan American Silver (NASDAQ: PAAS), both of which operate significant assets in stable jurisdictions like the United States and Canada, have seen their stocks surge over 40% in the last week. Similarly, silver streaming companies like Wheaton Precious Metals (NYSE: WPM) are benefiting from increased margins without the direct burden of rising energy costs associated with mining.
On the losing end are the titans of the green energy and AI revolutions. JinkoSolar (NYSE: JKS) and other solar manufacturers are facing a crisis as the cost of the silver paste required for high-efficiency TOPCon solar cells has nearly tripled in 18 months. Silver is now the single largest non-silicon cost component of a solar panel, threatening the economic viability of several large-scale utility projects. In the technology sector, NVIDIA (NASDAQ: NVDA) and Samsung Electronics (KRX:005930) are monitoring the situation closely. Silver’s unparalleled conductivity makes it indispensable for AI GPUs and high-bandwidth memory (HBM) modules. While these companies have high margins, the physical unavailability of silver-plated components could lead to production delays for the next generation of AI data centers.
Geopolitics and the "Tech-Metal" Transformation
This event signals a permanent shift in how silver is perceived by global governments. For decades, silver was the "forgotten" precious metal, often overshadowed by gold. However, its role as a "strategic dual-use material" highlights its critical importance in modern warfare and industrial dominance. The move by China follows a pattern of "resource nationalism" that has seen the weaponization of critical minerals to gain leverage in trade negotiations. This latest restriction mirrors the 2023-2024 bans on gallium and germanium, which left Western semiconductor firms scrambling to find alternate sources.
The regulatory implications are already rippling through Washington and Brussels. Lawmakers are facing mounting pressure to fast-track permits for domestic mining projects and to provide subsidies for silver recycling technologies. Historically, the last time silver faced such extreme volatility was during the Hunt Brothers' attempt to corner the market in 1980; however, unlike that speculative bubble, the current price action is driven by a genuine industrial shortage and geopolitical maneuvering. This sets a dangerous precedent, as it demonstrates that even widely used metals can be restricted if they are deemed essential for a nation's "strategic autonomy."
The Path to $100: What Comes Next?
In the short term, the market is bracing for extreme volatility. As long as China’s export licenses remain pending or delayed, the "physical premium"—the price paid to get metal delivered immediately—will likely remain at record highs. We may see a strategic pivot toward "silver thrifting" in the solar industry, where engineers attempt to replace silver with copper or aluminum. However, these transitions take years to validate, and for many high-frequency electronics, there is simply no substitute for silver's electrical properties.
In the long term, the $90/oz environment will likely trigger a massive wave of exploration and recycling. Dormant mines in Mexico, Peru, and the United States that were previously uneconomical at $25/oz are now being fast-tracked for reopening. Investors should expect a surge in "urban mining"—the recovery of silver from e-waste and old solar panels. However, with new mines typically taking 7 to 10 years to reach production, the structural deficit is unlikely to vanish overnight. The market opportunity for "non-Chinese" silver has never been greater, and companies with North American or Australian assets will likely command a "security premium" for years to come.
A New Era for the "Devil’s Metal"
The ascent of silver past $90/oz marks a turning point in the global energy transition and the AI race. What was once a humble byproduct of lead and zinc mining is now a frontline asset in a geopolitical struggle for technological supremacy. China's decision to restrict exports has exposed the fragility of Western supply chains and the risks of relying on a single dominant supplier for critical industrial inputs.
Moving forward, the market will transition from a period of "just-in-time" supply to "just-in-case" hoarding. For investors, the takeaway is clear: the era of cheap silver is over. In the coming months, keep a close watch on the MOFCOM licensing approval rates and the quarterly earnings of major solar and AI hardware firms. If the export restrictions remain airtight, $90 may only be a pit stop on the way to triple digits, fundamentally reshaping the economics of the 21st-century tech landscape.
This content is intended for informational purposes only and is not financial advice.
