🚨 SILVER SUPPLY SHOCK: WHAT’S REALLY DRIVING THE RALLY
Silver prices are surging due to a real physical supply crunch — not speculation. Here’s the concise breakdown:
1️⃣ China Tightens Silver Exports (From Jan 1, 2026)
China will require government licenses for silver exports.
Only large, state-approved producers qualify, effectively cutting off small/mid exporters.
With China controlling ~60–70% of global supply, this directly tightens the global market.
2️⃣ Market Already in Structural Deficit
Silver has been in deficit for 5 consecutive years.
2025 estimates:
• Demand: ~1.24B oz
• Supply: ~1.01B oz
A gap of 100–250M oz — expected to widen.
Mining growth is limited, new mines take years, recycling can’t fill the gap.
3️⃣ Physical Inventories Are Draining Fast
• COMEX: -70% since 2020
• London vaults: -40%
• Shanghai: 10-year lows
Some regions hold just 30–45 days of usable silver.
Physical premiums are spiking — Shanghai prices trade far above COMEX.
4️⃣ Paper vs Physical Disconnect
Paper-to-physical ratio ≈ 356:1.
Even small delivery demands could stress the system.
Markets are pricing this risk in real time.
5️⃣ Industrial Demand Keeps Rising
Silver is essential for solar, EVs, electronics, and medical tech.
Industrial use now accounts for 50–60% of total demand — with limited substitutes.
Silver isn’t moving on fear.
It’s moving because a genuine global supply squeeze is unfolding.
