Silver prices in China climbed sharply in late December as spot contracts on the Shanghai Gold Exchange settled above futures prices, signalling a rare and pronounced backwardation.
Market data showed the Ag(T+D) spot silver contract closed near 19,400 yuan per kilogram on 24 December, equivalent to roughly $78.55 per ounce.
At the same time, near-dated silver futures on the Shanghai Futures Exchange traded at lower levels, confirming an inverted price curve.
Backwardation typically reflects a strong preference for immediate delivery over future settlement.
Analysts said.
Traders interpreted the pricing structure as a sign of tightening physical supply in the Chinese silver market.
Exchange inventories in China declined to multi-year lows by November, highlighting reduced availability of deliverable metal.
China remains the world’s largest consumer of silver, with industrial demand continuing to outpace domestic supply.
The solar panel sector was cited as a major driver, as silver demand for photovoltaic cells expanded rapidly during 2025.