China's Silver Market Dominance, Now with Export Controls

[Viking]

 

[pmbug]

China Has a Silver Problem

Critically low SFE/SGE vault stock in November helped fuel (like gas on an already burning fire) investor interest in China (which needs physical silver to service high tech industries). China is trying to protect the vault stock for industry:

October
China bails out the LBMA. From Oct 13th to the 22nd, the SFE+SGE drained over 22M ozt (684 metric tons) as they were reportedly leasing silver to the LBMA.

Oct. 26 - Export restrictions
China announces export restrictions at the height of the SFE/SGE draining to bail out the LBMA. China will no longer bail out the LBMA (after Jan 1). The SFE/SGE drain slowed down considerably after the announcement.


November
SFE/SGE silver vault stock drained even as the SGE maintained a premium to LBMA spot. The SFE & SGE vault stock reached a critical low near the end of November before inflows returned. No official data yet, but it is likely the LBMA repaid leased silver in December.

Dec. 14 - SFE margin raise
SFE raises margins to the highest rate in SFE history. They are trying to cool investor demand by lowering available leverage.


Dec. 19 - SGE access curtailed
ICBC began closing SGE accounts for investors. Investor access to the SGE vault stock is being curtailed. Additionally, limits are being imposed on SFE futures positions only for investors.


Dec. 30 - SGE temporary margin hike
SGE will hike margins for just two days right around the exchange's New Year's holiday week. Is it a liquidity concern or an opportunity to shake out players that are over leveraged and dampen "investor exhuberance"?

 

[SilverStacker]

Zoom !

The CCP doesn't care about money, or ecology, or the health of its citizens. It cares only about power.

 

[nickndfl]

What does putting export controls have to do with the price of tea in China?