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China's insatiable silver appetite is changing the balance in the markets. As importers tended to meet the increasing industrial and investment demand, foreign purchases rose to the highest level in eight years at the beginning of 2026.
According to the customs data announced on Friday, the country imported more than 790 tons of silver in the first two months of the year. About 470 tons of silver purchased in February was recorded as the highest figure of all time for this month.
Strong domestic demand moved local prices well above international indicators. This situation melted the already low stock market stocks and accelerated the flow of metal from abroad to the country.
Silver prices started the year with a never-before-seen fluctuation. Prices, which skycket about 70 percent with a wave of speculative buying from China and other regions, suddenly returned their earnings at the end of January. Strong import data shows that physical consumption in China continues despite changes in trade flows.
Solar energy sector and investors are in operation
The demand in question is basically fed through two different channels. Retail investors looking for an alternative to increasingly expensive gold are turning to silver bars. On the other hand, solar panel manufacturers highlight their production before the abolition of export tax returns on April 1. The solar industry, which consumes about a fifth of the annual supply, is overwhelmingly located in China.
StoneX Group Inc. Rhona O'Connell, Head of EMEA and Asia Market Analysis, said the demand for physical ingots is very strong and solar cell manufacturers have shown outstanding performance, "At the same time, stocks on Chinese stock exchanges are gradually falling, which has its own psychological impact."
Much of the metal entered the country via Hong Kong, a gateway for precious metals to mainland China. Traders tried to take advantage of an attractive arbitrage opportunity in this process. AC Precious Metals Refinery Ltd. General Manager Stanley Cheung stated that the prices of large silver bars traded by banks in the region attract a premium of up to $8 per ounce in the first two months, whereas these ingots are usually traded at a discount compared to the indicative price in London.
London market resists demand shock
China's high imports have not yet disrupted the London market, thanks to the record level of silver entering the global trade center after last year's historic squeeze. The decrease in the amount of silver, which was held in the funds traded on the stock exchange worldwide and fell more than 1,900 tons this year, also released more metal in the market.
TD Securities Inc. Senior Commodity Strategist Daniel Ghali emphasized that the London market is doing very well despite this strong silver demand in China, "For the first time in more than a year, the market can face a demand of this scale without significant price disruptions or disruptions."
The loosening of supply in London has reduced the cost of silver borrowing. However, long-term rentals still remain more expensive due to measures taken against price fluctuations and another jam.
Visible stocks tracked by major exchanges from New York to Shanghai are either falling or far below their long-term average. While this table shows that metal remains scarce in the broader system, the market has reasons to worry.
Simone Knobloch, Head of Operations at the large Swiss refinery Valcambi SA, stated that China is one of the most important markets in the world in terms of both industrial consumption and silver investment, and said, "The feedback we receive from the market indicates a strong interest in physical products."
The search for a cheap alternative to gold tripled stocks
The appetite of silver, which developed as a cheaper substitute for gold, popularised investment ingots ranging from 20 grams to 1 kilogram in the Shuibei market in Shenzhen, the centre of China's retail ingot trade.
"Silver has become a hit between retail investors and sellers," said Song Jiangzhen, a researcher at the Guangdong Southern Gold Market Academy, stating that there is a change of mindset that consumers increasingly see gold as inaccessible.
White metal is currently trading at about $70 per ounce, while gold is rippling around $5,000 per ounce following this year's stormy rally.
Researcher Song reported that ingot sellers welcomed this change. Cheaper ingots mean reduced pressure on financing. According to Song's estimates, many sellers have tripled the total inventory in Shuibei in recent months, increasing their silver stocks to about 300 tons.
But for now, the markets are breathing a little easier. Yuan Zheng, an analyst at the Shanghai-based trading arm of Henan Jinli Gold and Lead Group Co., said that with the approach of the premium date, China's silver premiums softened and solar energy demand slowed down, "In the near term, we have moved into a situation where there is more supply than demand."
This situation also manifests itself in Shenzhen, where the silver bars in the window find fewer buyers. However, according to experts, this may not be the end of the story. "All that is needed is a new increase in prices," researcher Song said, stating that retail investors tend to follow rising trends instead of buying declines.
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