The global silver market is witnessing a sharp increase in demand as China recorded its highest imports in history in March, clearly reflecting the trend of shifting investment cash flow and industrial demand in the context of global economic instability.
According to a report by The Kobeissi Letter, China's silver imports increased by 78% compared to the previous month, reaching about 836 tons in March - 173% higher than the 10-year seasonal average. In general, since the beginning of the year, imports have reached about 1,626 tons, the highest level ever recorded.
The main driving force comes from two factors. The first is the wave of buying by individual investors, when silver is considered a lower-cost alternative to gold in the context of high precious metal prices. The second is demand from the solar energy industry, when manufacturers accelerate production before the end of the export tax refund policy from April 1.
Currently, the solar energy industry consumes about 20% of the total global silver supply each year, of which China plays a central production role. This causes policy fluctuations in this country to directly affect the supply-demand balance of the market.
According to the annual Silver Survey report by the Silver Institute, the silver market is expected to continue to face shortages in 2026, marking the sixth consecutive year that supply has not met demand.
A survey by Metals Focus forecasts a shortage of up to 46.3 million ounces this year, showing that market inventories are being significantly eroded. Although mining output is almost flat and supply from recycling has increased to a multi-year high, it is still not enough to meet growing demand.
Mr. Philip Newman - Director of Metals Focus - said that the silver market is increasingly affected by investment cash flow, along with macroeconomic factors and tighter liquidity conditions.
In 2026, industrial demand for silver is forecast to decrease by about 3%, to 639.6 million ounces, marking the second consecutive year of decline. The main reason comes from the solar energy sector - which was the biggest growth driver before when demand is expected to decrease by 19% due to high silver prices forcing businesses to reduce use or look for alternative materials.
However, according to Mr. Newman, silver consumption is still maintained at a historical high and significantly higher than the pre-pandemic period. In particular, demand from new sectors such as data centers, electrification of the economy and electric vehicle production are becoming alternative growth drivers.
In the context of partly weakening industrial demand, investment cash flow is returning to play an important role. Mr. Newman believes that demand from individual investors can completely compensate for the decline from the manufacturing sector.
A noteworthy trend is the increasing role of investment products such as silver ETFs. After recording record capital flows in 2025, holdings of these products are forecast to continue to increase by about 30 million ounces in 2026.
However, experts warn that ETF capital inflows and outflows may create strong fluctuations for the physical market. When cash flow flows in, the circulating supply is narrowed, causing price pressure; conversely, when cash flow withdraws, the amount of metal returning to the market may cause prices to fall rapidly.
In addition, demand for physical silver, especially coins and silver bars, is forecast to increase by 18% in 2026, to the highest level since 2022. This is considered an important factor in strengthening the market foundation in the context of increasing volatility.
Although current demand is partly driven by short-term factors such as tax policies, many experts believe that the upward trend may last when supply is limited, investment demand is maintained and the trend of shifting to clean energy continues to occur.
However, in the short term, the silver market is forecast to face major fluctuations and liquidity risks, especially when investment flows and policy factors may change rapidly.
In general, the silver market is entering a sensitive phase, when the combination of investment demand, policy fluctuations and new industrial trends will continue to shape prices in the coming time.
