Silver soars: green-energy demand and a supply deficit stoke speculative flows

The soaring price of silver was one of the key themes in global markets at the end of last year. Parallels can be drawn with gold's recent rise to records. But silver has even more industrial uses than its precious-metal counterpart -- especially applications relevant to the green-energy transition.

Combined with its traditional role as a macro hedge and constraints on new supply, these factors led to a speculative surge as traders bet on a sustained global deficit.

These charts examine the supply shortage and new sources of demand, with a special focus on China's role. Silver futures turnover on the Shanghai exchange surged; meanwhile, warehouse stocks of the metal warrants have been drawn down to their lowest levels in a decade.

US Geological Survey data shows that global mining output of silver peaked in 2016 and has been trending lower since then. Mexico, China and Peru top the table of global producers. (China also holds a significant and growing share of global silver reserves, behind Peru, Australia and Russia.)

On the demand side, solar-power technology is the story. Photovoltaic (PV) cells now account for almost one‑fifth of total silver demand and roughly a quarter of industrial demand, up sharply from a decade ago. Each crystalline silicon solar panel uses around 20 grams of silver.

This again brings us to China, the world's biggest producer of PV cells (and a leader in green power more generally). Export volumes for Chinese PV cells have increased almost tenfold since 2022; the Indian market is a key destination.

China's domestic market for solar panels is also the world's largest -- explaining how PV has accounted for the bulk of incremental power generation capacity additions since 2022.

Demand for physical gold and silver (often in the form of jewellery) has also strengthened in China. And geopolitics are now tightening the supply-demand balance further, with parallels to the "rare earths" crunch.

This year, China will bring in controls on silver exports, moving the metal into a license‑based “strategic resource” regime. The controls are expected to significantly reduce the amount of silver available for global trade. (The US has also recently designated silver as a critical mineral.)

Ahead of these new export controls, Chinese silver exports rose in late 2025 as the metal was shipped to London and other offshore hubs.

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