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▲ Silver/AI generated image
As China's silver export controls and the US reclassification of strategic minerals intertwine, supply instability in the silver market has once again come to the forefront. With industrial demand continuously outstripping supply, bullish prospects for silver are also gaining momentum.
According to financial media FXLeaders on July 7 (local time), China's Ministry of Commerce introduced a strict licensing system for refined silver exports. Licenses are limited to large, state-approved institutions. China holds a dominant position in the manufacturing of solar panels and electric vehicle infrastructure.
China also implemented a ban on sulfuric acid exports. Sulfuric acid is a key chemical raw material used in copper mining in Chile's Hiprich. Approximately 70% of the world's silver is produced as a byproduct of copper, lead, and zinc mining. If copper processing is blocked, Western silver production will also be simultaneously pressured.
The US Geological Survey (USGS) added silver to its official list of critical minerals. The US government subsequently applied Section 232 of the National Security Trade Act. It was determined that reliance on imported refined silver poses a direct risk to the economy and defense infrastructure.
Silver is used not only in commercial AI data centers but also in the defense industry. It is cited as an essential metal for satellite communications, missile guidance systems, and advanced radar. FXLeaders diagnosed that although silver prices briefly surpassed $100-$120 per ounce earlier this year before sharply declining, its structural fundamentals remain robust.
The silver market has been experiencing a structural supply deficit for six consecutive years. The deficit is estimated to be between 46 million and 67 million ounces. Industrial fabrication demand accounts for over 50% of total silver demand. Although there has been a reduction in silver usage in the solar sector, the power demands from AI data centers and electric vehicles are supporting the price floor.
[Article Key Summary]
-China strengthened its refined silver export licensing system and indirectly pressured the silver supply chain by banning sulfuric acid exports.
-The US added silver to its official critical minerals list and applied Section 232.
-The silver market has experienced a supply deficit for six consecutive years, with the shortfall estimated at 46 million to 67 million ounces.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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