China Will Pay Above Spot and is Buying Silver Concentrate Directly from Mexico, Peru and Bolivia.

By paying the above spot for Silver concentrate from Peru, Mexico, and Bolivia, they are also achieving another significant objective: US weapons and aerospace manufacturers now have to stand in line

Reports emerging from China indicate that the country is importing silver concentrate directly from major producing nations like Peru, Bolivia, and Mexico.

This development has significant implications for the silver market, particularly as it suggests a shift away from traditional trading platforms such as COMEX

By sourcing silver concentrate directly, China is effectively bypassing commodity exchanges which could diminish their influence on price discovery. We have already seen massive divergences (or a disconnect between paper prices and the physical silver market,) now we have more complications on how Silver prices are determined.

But they don’t alter the fundamentals. China understands and this supports the logic that Silver is experiencing the highest demand the World market has ever witnessed and is the most desired commodity on Planet Earth (next to gold)

The robust demand driving these imports is strategically fueled by China's thriving solar panel and electric vehicle industries. This is not just a trend, but a deliberate part of China's economic strategy.

By paying the above spot for Silver concentrate from Peru, Mexico, and Bolivia, they are also achieving another significant objective: US weapons and aerospace manufacturers now have to stand in line behind China.

It's not just about buying silver they require for their manufacturing sector they also want to dismantle the US military-industrial complex, the more for China, the less for the US Defense contractors that are the World’s #1 consumers of Silver.

As the largest manufacturer of these technologies, China's heightened appetite for silver could exert upward pressure on prices over the long term.

Furthermore, by securing silver directly from producers, China is enhancing its control over the supply chain, which aligns with its dominance in solar photovoltaic manufacturing—an industry where it accounts for over 80% of global capacity across various production stages.

This direct sourcing strategy may also accelerate the depletion of global silver inventories, with some analysts predicting that stocks could be exhausted as early as 2025. As China continues to import silver concentrate, it could contribute to a tightening physical market, making it more challenging for other market participants to gauge true supply and demand dynamics.

Additionally, this trend raises concerns about price transparency. By bypassing major exchanges, there may be less clarity regarding actual market conditions. The geopolitical implications are also noteworthy; China's direct sourcing could reduce the influence of Western financial institutions on silver pricing.

Overall, while these direct imports may not have an immediate effect on spot prices, they highlight the evolving dynamics of the global silver market and underscore China's growing role as a key consumer and influencer in the precious metals space.

“China's domestic silver production is in decline, and with its industrial demand—especially for solar panels—soaring, the country is aggressively securing overseas silver supplies. This strategic stockpiling, coupled with China’s massive consumption needs, poses serious implications for the global silver market.

The current situation suggests that China's actions could lead to a significant increase in silver prices, potentially disrupting global supply chains.” - Jerusalem Post

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https://www.jpost.com/business-and-innovation/precious-metals/article-813589
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