Key Takeaways
China’s silver imports hit a record 836 metric tons in March, more than doubling the previous high, driven by industrial and investment demand.
The surge in physical demand is draining inventories in Western vaults, with COMEX stockpiles tightening and LBMA holdings declining by 0.1% in April.
Global Silver Balance:
Silver prices broke above $85 an ounce, a two-month high, after data showed China’s net imports hit a record 836 metric tons in March, tightening the physical market and drawing down global inventories.
"China is the only reason for the current silver price surge," Andrew Matthews, Global Head of Precious Metals Distribution at UBS, said in a note. He added that while US tariff policy has created market structure confusion, the underlying driver is physical demand from Shanghai.
The record import volume, nearly triple the historical average for March, was driven by two main factors: aggressive stockpiling by China's vast solar panel industry ahead of an April 1 export tax rebate change, and retail investors buying small silver bars as a cheaper alternative to gold. The demand surge is straining global supplies, with holdings in London vaults falling 0.1% to 27,454 tonnes in April, according to the LBMA.
The market is now facing its sixth consecutive annual supply deficit, according to the Silver Institute. With inventories in New York’s COMEX warehouses also reportedly tightening, traders are watching to see if the physical squeeze will force a re-pricing higher, with UBS strategist Joni Teves maintaining a $100 per ounce year-end forecast.
The massive flow of silver to China is reversing global metal trade routes and creating dislocations in other major trading hubs. Inventories at the Shanghai Futures Exchange (SHFE) had been severely depleted after bailing out London’s LBMA from a potential default during a surge of Indian buying in late 2025.
In response, the SHFE hiked silver margin requirements to 22% and went on a buying spree, increasing its silver inventory by over 50% in March alone. This hoarding has left Western vaults, particularly the CME’s COMEX in New York, with thinning buffers for delivery. According to analysts, moving metal back to New York from London or Zurich is a complex process, meaning the low inventory levels could lead to a short squeeze and further price volatility in the coming months.
While investment demand has been a key driver, silver’s industrial use case continues to expand, underpinning the structural deficit. The solar industry, which is heavily concentrated in China, already consumes roughly 20 percent of the world's annual silver supply.
Beyond the green energy transition, a new wave of demand is emerging from the robotics sector. A recent Morgan Stanley report estimated the market for humanoid robots could swell to over one billion units by 2050. Analysts project that even a conservative estimate of 20 grams of silver per robot would translate into 20,000 metric tons of new, non-recoverable demand—an amount equivalent to nearly 70% of current annual global mine production. This, combined with persistent demand from the EV, semiconductor, and AI data center sectors, provides a strong fundamental floor for prices.
This article is for informational purposes only and does not constitute investment advice.
