I understand that cinnabar was valuable as a pigment, but I don't know why metallic mercury would be produced in substantial quantities. Its current uses seem modern and specialized.
In particular, why did China have so much mercury that it could be made into rivers for Qín Shǐ Huáng Dì's tomb?
Mercury - a metal that is fluid at room temperatures - is unique among metals, so it was a natural curiosity for many cultures.
More importantly, mercury is crucial to many efforts to retrieve gold and silver from ore. Finding either of the precious metals in pure natural forms in sufficient size to pick up - in the form of nuggets - is relatively rare. Most often the metals are bound in a matrix of other materials that makes it very difficult to extract after pounding the ore into powder (which is the usual first step in milling).
Because mercury readily combines with gold and silver to create an "amalgam," it is crucial to arriving at pure gold and silver. Once the heavy amalgam is formed, it is easy to wash away the worthless excess materials. The amalgam can then be heated, which drives off the mercury as a vapor, leaving the precious metal(s) behind. Mercury provided the easiest way to extract gold and/or silver from deposits, a method that was used for a very long time until it was replaced by cyanide/zinc extraction at the turn of the twentieth century.