A perfect storm of surging demand from retail investors and rapid consumption from manufacturers ramping up solar panel production ahead of expiring tax rebates resulted in the largest single month of silver imports in China’s history, according to a report from The Kobeissi Letter.
“Chinese silver imports rose +78% MoM, to a record ~836 tonnes in March,” they wrote in an X post. “This is +173% above the 10-year seasonal average for March. Year-to-date, silver imports are up to ~1,626 tonnes, the highest on record.”
And while some analysts have pointed out that the tax rebate was likely the major driver and was a one-off event, constrained supply combined with still-strong investment appetite and the potential for renewed interest in non-hydrocarbon-based energy in the wake of the Iran conflict could result in another surge in demand – one that could last for years to come.
According to the Silver Institute’s annual Silver Survey published on April 15, investors should expect further volatility and potential liquidity issues in the silver market through the rest of the year as the precious metal is expected to see another significant supply deficit.
The survey, which was conducted by British research firm Metals Focus, projects the silver market will see its sixth consecutive annual deficit – totaling 46.3 million ounces in 2026 – underscoring how years of undersupply continue to erode above-ground stocks and leave the market vulnerable to renewed bouts of volatility.
Despite headwinds from shifting demand in the solar sector, Newman said that resilience in industrial consumption comes from a more diverse landscape. He explained that demand for data centers, the broader electrification of the global economy, and electric vehicle manufacturing are all sources of consumption growth for silver.
And while industrial demand faces some headwinds, Newman said that investment demand has once again become a driving force in the broader marketplace.
“You could see losses in the industrial sectors being mopped up by the retail investment. It’s not out of the realms of impossibility,” Newman said.
One of the most important shifts in the silver market has been the growing influence of investment demand—particularly retail buying and exchange-traded products (ETPs).
ETP holdings are projected to increase again following record inflows in 2025. Metals Focus expects global ETFs to see modest inflows of around 30 million ounces; however, Newman said that the small net gain masks significant swings beneath the surface.
“This is quite a swing from where we are given the sizable liquidations we’ve already seen this year,” he said.
Beyond flows, ETFs are also having a growing impact on the physical market. Large inflows can remove metal from circulation, tightening available supply and contributing to liquidity squeezes, while outflows can quickly release metal back into the market, amplifying price volatility.
The survey highlights that coin and bar demand is expected to rise 18% in 2026, reaching its highest level since 2022. At the same time, physical demand remains a critical pillar of the market, with strong buying interest helping to tighten supply conditions, particularly during periods of price momentum and market stress.
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