The spot price of silver on the Shanghai Precious Metals Exchange on December 24, 2025, reached 19,400 Chinese yuan per kilogram, equivalent to approximately $78.55 per ounce at that day's exchange rate. This placed the Shanghai spot price above Comex prices, where futures closed at $72.36 per troy ounce, highlighting local tensions in the Chinese market.
Silver Price Rise in Shanghai
The Shanghai spot quotation of 19,400 yuan/kg held a premium over the international benchmark on Comex, reflecting higher demand for immediate delivery within China. On the Shanghai Futures Exchange, near-term contracts traded below spot prices, with the main contract around 17,609 yuan per kilogram (approximately $78.02/oz), confirming a backwardation in the price curve.
What Is Backwardation and Why It Matters
Backwardation is a situation where the spot price is higher than futures prices, meaning buyers are willing to pay more for metal "in hand" than for delivery later. This pattern typically indicates supply shortages or heightened demand for immediate delivery, as was observed in China at the end of 2025. Practically, backwardation shifts seller and buyer priorities: metal tends to be held physically rather than rolled into paper contracts.
Causes of Silver Shortage in China
A key factor was the decline of inventories on Shanghai exchanges to multi-year lows by November 2025, which intensified pressure on the spot market. Strong industrial demand—primarily from solar energy, electronics, and electric vehicles—outpaced imports and domestic production, worsening the shortage.
In addition to internal demand, supply restrictions from major mining regions, particularly Peru and Mexico, also narrowed the metal inflow to the global market and China. This combination of factors boosted the local premium in Shanghai and fostered backwardation.
Impact on Global Markets
The Shanghai premium over Comex demonstrated that local physical imbalances in China are reflected in global prices: Shanghai spot traded higher than Comex futures, signaling supply chain strains. The drop in Shanghai inventories and supply issues from Peru and Mexico are part of this picture, amplifying market disparities.
Why It Matters
If you mine cryptocurrency in Russia, the direct impact of rising silver prices on mining farm operations is usually limited, but indirect effects exist. Silver is widely used in electronics, and price increases can raise the cost of components for power supplies, circuit boards, and connectors, eventually affecting repair and replacement expenses.
Moreover, tightening inventories and local demand in China may cause sharper short-term price fluctuations for electronics and solar equipment, especially if production chains face disruptions. Therefore, even small miners benefit from monitoring prices and availability of key components.
What to Do?
- Monitor prices and availability of key components: power supplies, circuit boards, and other parts that may use silver.
- Budget for potential increases in repair and replacement costs—keep spare parts on hand for quick swaps.
- When purchasing new equipment, compare offers and delivery times to avoid shortages caused by component deficits.
- Stay informed: detailed reasons for price rises can be found in related articles, such as why silver prices are rising and the review gold and silver price increases.