21. April 2026
One of the most striking developments this year in the silver market is the growing divergence between Asian and Western silver prices. Wholesale prices for large silver bars traded by banks in Hong Kong were at a premium of up to eight US dollars per ounce above the London benchmark price – even though Hong Kong silver has historically usually traded at a discount to London.
The gap to prices in Shanghai is even more pronounced. The physical silver price on the Shanghai Gold Exchange has decoupled sharply from Western benchmark prices, trading at premiums of around 12% to 13% above the LBMA spot rate and COMEX futures prices. At the end of January 2026, the Chinese reference quotation for silver was even almost 17 US dollars per ounce above the London price.
The backdrop to this development is a combination of strong Chinese demand and restricted export options. In the first two months of 2026 alone, China imported around 790 tonnes of silver, including 470 tonnes in February. At the same time, the Chinese government has restricted silver exports to just 44 state-approved companies, limiting the global arbitrage mechanism between markets.
In a research note in light of recent developments, Goldman Sachs warned that China’s new export licensing system could transform the global silver market from an integrated system into isolated regional inventories that cannot be balanced against one another.
Price action and high market volatility in 2026
Price action in 2026 was marked by extraordinary volatility. The silver price peaked at almost 120 US dollars per ounce at the end of January before the white metal moved into a correction in February and March. Whether this has already fully run its course or whether the silver price will see another final sell-off will become clear in the coming weeks.
It is noteworthy that physical liquidity in the London silver market remains tight. According to the Silver Institute, geopolitical tensions, US trade policy and uncertainty over the independence of the US central bank, the Federal Reserve, are currently the key supportive factors for the silver price.
Countervailing developments: risks to silver demand
However, a complete picture of the current situation in the silver market also requires a look at the counterarguments. The photovoltaic sector, until now one of the most important drivers of industrial silver demand, is systematically reducing the silver content per solar module. Longi Green Energy, one of the world’s largest solar panel manufacturers, has announced mass production of copper-based solar cells from the second quarter of 2026. Should other manufacturers follow this example, a potential substitution threat for silver in the solar supply chain becomes apparent.
There are also alternatives in battery technology: the joint venture between Stellantis and US start-up Factorial has validated a semi-solid battery cell that does not require silver. These developments dampen the outlook for a purely silver-based dominance in electromobility.
Silver is and remains an exciting investment
In conclusion, it can be said that the silver market is in a structurally tight phase, characterised by six consecutive supply deficits, growing institutional and government demand, and increasing geographic fragmentation of price formation.
Possible mass production of solid-state batteries with high silver demand from 2027 could further intensify this dynamic – but for now it remains a future scenario with significant technological and economic uncertainties. Investors and industrial buyers should therefore keep both sides of this equation in mind.
