Silver and rare metals have an interesting characteristic—the industrial umami effect. What does that mean? It means these materials are used in very small quantities in most industrial products, and their cost share is not high, but you can't do without them—they are a hard requirement.

This leads to a phenomenon: when the prices of silver and rare metals surge, the costs for downstream industrial companies do increase, but the rise is not significant. The key point is that these materials must be used; production can't be halted just because they become expensive. The losses from stopping production are far more terrifying than the cost increase. So companies can only grit their teeth and accept the price hikes while starting to consider alternatives. But finding substitutes takes years of R&D and application testing—it’s not something that can be switched quickly.

Here's an interesting comparison. Iron ore and rebar are different—once rebar prices rise above 3000 yuan, iron ore finds it hard to go higher because high steel prices will directly suppress downstream demand. Only when steel prices stabilize can iron ore have room to rise. But rare metals don't follow this pattern; their industrial umami attribute means that price increases have limited demand suppression effects.

Looking at the historical trends of metals like nickel and cobalt makes this clear. When prices surge, industrial demand doesn't decline significantly. Instead, after prices rise, capital sees huge profit opportunities and invests heavily to expand capacity, leading to a surge in supply. This is the real killer that suppresses prices. So when cobalt production cuts appear in 2025, prices immediately rebound.

This year's price increases in gold, silver, copper, cobalt, tungsten, and rare earths are essentially supply-side issues. If in the future a large, low-cost deposit of a rare metal is discovered, its price will definitely fall. But such opportunities are not very likely right now, which is why the current upward trend appears so solid.