Chinese Silver Market Trends and Outlook (pp. 1, 3, 5)
- Exceptional tightness and price rally in early 2026 (p. 1)
  - Ag(T+D) prices on the Shanghai Gold Exchange (SGE) peaked at 31,000 yuan/kg (+63% in January), outperforming dollar silver which hit around $121/oz (+42% in January) (p. 1).
  - Investment surged due to strong price performance and a shift from gold to silver bars following the November 2025 gold VAT policy change (p. 1).
  - Photovoltaic (PV) industrial demand strengthened in Q1 as manufacturers rushed procurement ahead of the April 1 removal of export tax rebates (p. 1).
- Import surges, market reversal, and inventory recovery (pp. 3, 5)
  - Local prices traded at a $10/oz premium to London in February and March, driving adjusted bullion imports to 510t in Q1.26 (up from 58t in Q1.25) plus 132t in April (p. 3).
  - Demand declined post-April as investor interest cooled, gold participants adapted to new VAT rules, and PV makers consumed inventories, sending local prices back to a discount and reducing May–September imports to 173t (pp. 3, 5).
  - Combined SGE and Shanghai Futures Exchange (SHFE) silver inventories rebounded from a low of 662t at end-March to 2,225t by end-October (p. 5).
- 2026 full-year demand projections and structural factors (p. 5)
  - Total Chinese silver demand is projected to contract by 4% in 2026, as gains in physical investment are offset by declines in jewellery (-10%) and industrial consumption (p. 5).
  - Physical investment will remain modestly above 2025 levels and over double 2024 levels, though a 13% VAT and wide buy-sell spreads remain key constraints (p. 5).
Key Developments Across Precious Metals Markets (p. 1)
- Gold prices dropped below the $3,900s as stronger-than-expected US CPI data raised expectations for a larger Federal Reserve rate hike (p. 1).
- The gold:silver ratio eased to near 77 after temporarily breaching 80 for the first time in 2026 (p. 1).
- Sibanye-Stillwater reduced its FY2026 US 2E PGM guidance from 280–300koz down to 245–255koz following a five-week strike (p. 1).
- China's imports of unwrought palladium and powder from Russia plummeted 73% y/y to 48.7koz in September (p. 1).

China silver market normalises after an exceptional start to 2026

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