SEOUL, January 02 (AJP) - China’s move to tighten controls on silver exports is set to add fresh cost pressure on South Korean industries heavily reliant on the precious metal, at a time when prices are already surging on strong demand from high-tech and clean-energy sectors.
From Jan. 1, exporters in China must obtain government approval to ship silver overseas, after Beijing added the metal to its “2026 List of Goods Subject to Export Licensing Administration.” The measure places silver alongside tungsten, antimony and rare earth elements — materials China has increasingly treated as strategic assets in its economic and technological rivalry with the United States.
China dominates the global silver supply chain, accounting for an estimated 60 to 70 percent of internationally traded refined silver. It also ranks second worldwide in silver reserves and mine output, trailing only Mexico, reinforcing its position as a pivotal player capable of influencing global supply conditions.
The policy comes as silver has emerged as “the new gold,” buoyed by soaring demand tied to its wide industrial applications and its appeal as a hedge asset. Silver futures surged more than 150 percent in 2025, rising from around $20 per troy ounce at the start of the year to about $71 by the final trading session — the strongest gain among major commodities. The rally was driven by five consecutive years of global supply deficits and a weakening U.S. dollar, which boosted demand for safe-haven assets.
Although prices briefly retreated from a late-December peak of $86 per ounce, China’s export curbs reignited market momentum. Silver prices jumped about 3 percent on Friday, approaching $73 per ounce as of 1:30 p.m.
For South Korea, the trend poses a growing headwind. Silver is a critical input across the country’s high-tech manufacturing base, including electronics, semiconductors and advanced materials, as well as a key component of the domestic smelting industry.
The metal plays an increasingly central role in the AI and digital era due to its superior electrical conductivity — the highest among major metals. It is used as a protective coating to prevent copper oxidation in printed circuit boards, and as electrodes in multilayer ceramic capacitors (MLCCs), both of which are essential components in smartphones, data centers and AI servers.
Beyond electronics, silver is indispensable in solar panels, where silver paste converts sunlight into electricity. It is also used, alongside platinum, as a catalyst in water electrolysis systems for hydrogen fuel production. As a result, rising silver prices directly translate into higher costs and weaker margins across a wide range of advanced industries.
The burden is already showing up in trade data. According to the Bank of Korea, import prices for the “other precious metals” category — which includes silver — surged 66 percent year on year in November, exacerbated by both higher global prices and the weak won.
Korea Zinc, one of the world’s largest non-ferrous metal producers, is particularly exposed. Silver accounts for more than 30 percent of the company’s total revenue, surpassing even zinc, its flagship product. With ore procurement costs climbing, analysts warn that profit margins could come under mounting pressure.
Wall Street expects the rally to continue. Goldman Sachs has forecast silver prices could reach $100 per troy ounce in 2026, while Citigroup projects a potential peak of up to $110, underscoring the long-term supply tightness surrounding the metal.
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