Q1 2026: China's Spot Silver Ingot Market Shifts from Frenzy to Rationality Amid Cooling Investment and Imports Surge

In Q1 2026, China’s spot silver ingot market underwent a marked shift from extreme frenzy to a rational return. As investment enthusiasm cooled significantly and large volumes of imported silver ingots flowed in, the structure of spot premiums underwent a fundamental adjustment, while the market’s supply-demand pattern continued to be reshaped.
I. Wild Swings in Prices and Spot Premiums
According to SMM data, the price of silver T+D on the Shanghai Gold Exchange (SGE) saw historic fluctuations in Q1 2026. The weighted average price in January was 23,156.5 yuan/kg, with a record high of 29,797 yuan/kg; the average price in February pulled back to 20,796.1 yuan/kg; and the average price so far in March was 21,836.8 yuan/kg.
Spot premiums fluctuated even more sharply. In January, the average spot premium against T+D was only 304.25 yuan/kg; in February, it surged to 2,018.21 yuan/kg, with a peak of 3,650 yuan/kg; in March, it quickly pulled back to 907.5 yuan/kg, and had already fallen to 500 yuan/kg by March 13.
II. Cooling Investment Appetite, Capital Rotation, and the Evolution of the Supply-Demand Pattern
In January 2026, investment enthusiasm in the silver market peaked. At that time, silver’s market capitalization surpassed $5 trillion, overtaking Nvidia to become the world’s second-largest asset, and retail investors’ enthusiasm even exceeded that for the artificial intelligence trading theme. However, as exchanges sharply raised margin requirements and implemented other risk-control measures, the previously frenzied bullish sentiment cooled noticeably in February. Although geopolitical conflicts briefly boosted safe-haven demand in March, precious metals were no longer the target of capital chasing—tight oil supply drove speculative funds to rotate into the crude oil and chemical derivatives markets.
SMM monitoring showed that from month-end January to early February, investment demand in Shenzhen’s Shuibei market pulled back significantly from the level seen before New Year’s Day, while end-user consumers’ "buy-on-bullishness" demand declined. Since February, the price spread between physical silver ingots in and outside China has kept the import window open, and imported silver ingots have begun flowing in on a large scale. According to the SMM survey, early imports mainly consisted of crude silver, but idle domestic crude silver processing capacity was limited, and smelters prioritized their existing production schedules, pushing back the scheduling of newly added crude silver toll processing business, so refined silver processed from imported crude silver only entered the market slowly in late February. In addition, silver ingots previously exported under processing trade were re-imported and returned, either in the form of large ingots or processed into small ingots meeting national standards, directly impacting the market at prices slightly below domestic spot premiums. As of March 12, premiums for standard silver ingots in the Shanghai market against T+D had fallen to 600-700 yuan/kg, with large-volume deals further negotiable to 400-500 yuan/kg; some suppliers accepted lower-priced transactions due to the narrowing spot-futures price spread and cost pressure. As imported silver ingots were concentrated in the Shenzhen market, the pace and magnitude of premium declines there were faster than in Shanghai, prompting some suppliers to sell off on concerns over further declines.

III. Outlook: Rational Correction and Structural Adjustment
SMM analysis suggested that the spot silver ingot market in China will show the following trends:
1. Premiums Will Continue to Narrow
Imported silver ingots will continue to flow in during mid-to-late March, and many traders said there were still imported orders that had been booked but not yet arrived, easing the earlier tight supply situation. Downstream industrial rigid demand had gradually completed stockpiling after the Chinese New Year holiday, and amid weaker silver prices and lower premiums in the short term, market participants remained cautiously on the sidelines. Both physical investment demand and industrial purchase demand turned weaker, and domestic premiums for silver ingots are expected to continue narrowing.

2. Structural Adjustment in Investment Demand
The previously overheated investment demand had clearly cooled, and the market returned to being led by industrial rigid demand. Expectations that export tax rebates for the PV industry will be canceled in early April supported demand from rush to export orders and matched pending delivery orders. In March, stockpiling enthusiasm among downstream silver nitrate and silver powder enterprises remained moderate, supporting industrial supply and demand, while subsequent recovery in demand in China's PV market still warrants attention.

3. Price Fluctuations Will Become More Rational
The Shanghai Gold Exchange (SGE) repeatedly adjusted the margin ratio and daily price limit range for silver deferred contracts, aiming to prevent market risks. As regulatory measures are strengthened and market participants return to rationality, silver price fluctuations are expected to stabilize.

4. Import Impact Will Continue to Emerge
The continued inflow of imported silver ingots not only eased tight domestic supply, but also affected the processing trade export pace of China's smelters—smelters had already adjusted their export pace, increasing domestic supply in the short term.

Conclusion
The profound changes in China's spot silver ingot market in Q1 2026 marked the market's shift from irrational frenzy back to rational fundamentals. Under the dual effects of fading investment enthusiasm and import impacts, the market underwent structural adjustment. In the future, the market will place greater emphasis on the balance of supply and demand fundamentals, and price fluctuations will become more rational. During this transformation process, market participants need to adjust their strategies in a timely manner to adapt to the new environment.