As China begins export controls on silver this year, silver's status is rising from an industrial metal to a "strategic material." This has boosted expectations for improved earnings at domestic smelters such as Korea Zinc and LS MNM, which produce large amounts of silver as a byproduct of nonferrous metal refining.
According to the smelting industry on the 14th, Korea Zinc's silver sales volume totaled 1,535 tons as of the end of September last year, up 1.7% from a year earlier. Annual sales volumes were 2,100 tons in 2022, 1,900 tons in 2023, and 2,000 tons in 2024. Based on 2024, that accounted for 5.6% of global silver output (36,000 tons), ranking No. 1 in the world. Korea Zinc's Onsan smelter is cited as the world's largest single-site producer of silver.
Based on 2024, Korea Zinc's silver revenue was 2.3836 trillion won, accounting for 29.5% of total revenue (8.0890 trillion won, standalone basis). Considering that zinc, the main product, posted revenue of 2.5605 trillion won with a 31.7% share, silver is the second-largest contributor among Korea Zinc's products.
With silver prices surging last year, Korea Zinc's silver revenue is estimated to have jumped. Silver prices alone rose more than 150% last year. Korea Zinc's silver revenue in the third quarter of last year was 827.0 billion won, up 26.3% from 655.0 billion won a year earlier.
According to the London Metal Exchange (LME), on the 29th of last month, the spot price of silver surpassed $80 per ounce intraday for the first time ever. As of 9 a.m. on the 14th (Korea time), the price is around $88 per ounce.
LS MnM also produced 400 tons of silver last year. The company operates the nation's largest copper smelting business, extracting silver in the process of producing 680 kilotons of cathode copper annually. An LS MnM official said, "We are equipped with facilities capable of obtaining about 1,200 tons a year of precious metals such as gold and silver, but we cut output last year to balance supply and demand."
In financial markets, some expect silver to top $100 per ounce this year. The reasoning is that demand is likely to keep growing this year because silver is used in electric vehicles and solar cells and panels. A Tesla electric vehicle uses 25–50 grams of silver, and a high-spec solar panel uses about 20 grams.
A Korea Zinc official said, "Industrial demand has increased for power cables, electric-vehicle batteries, and renewable energy, and a preference for safe assets has also emerged, keeping silver prices strong." In its business report, Korea Zinc lists specific uses for silver such as "electroplating, electrical contacts." LS MNM also describes uses such as "electrode materials for solar cells, electrical and electronic electrode materials."
With China recently moving to control silver exports, expectations for higher silver prices have grown further. China's Ministry of Commerce released the "2026 list of goods subject to export license management" on Dec. 31 last year, including silver. This effectively constitutes silver export controls by allowing exports only by 44 designated corporations for two years starting this year.
China said it is controlling silver exports for "resource and environmental protection," but in the global market, the move is seen as a restriction on rare earth exports and a weaponization of resources. China's silver reserves are among the world's largest. From January to November last year, China's silver exports reached 4,600 tons.
Elon Musk, Tesla's chief executive officer (CEO), referenced China's move and wrote on X, "This is not good. Silver is needed for many industrial processes." The United States also added silver to its list of critical minerals essential to its economy and national security in November last year.
Investment bank (IB) Goldman Sachs said in a report on the 8th, "As silver liquidity has tightened, price sensitivity has risen three to four times the usual," adding, "Extreme price volatility will persist throughout the year."
FXStreet, a foreign exchange and finance outlet, also said, "China, which accounts for about 60%–70% of global silver supply, is leveraging silver as a strategic bargaining chip, as it did with rare earths in the past," and predicted that "an export license regime limited to 44 companies will trigger a 'supply shock' in the global industrial silver market and push prices higher."