Shanghai Futures Exchange starts a silver futures trade

... this coming Thursday, the Shanghai Futures Exchange begins trading silver contracts. China Daily noted there had been an absence of silver trading ability in China and -- significantly -- it would make the market more liquid.
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The China Daily newspaper on April 26th reported that China had received approval to start trading silver futures on the Shanghai Futures Exchange. "There has been an absence of a means of trading in silver in China," Wang Ruilei, an analyst with precious metal trader CGS Co Ltd, told China Daily. "The market will be bigger and more liquid with the advent of these futures contracts." Allowing Chinese investors access to the silver market will provide an influx of investment dollars into the commodity, and make it more difficult for American speculators to manipulate the markets in their favor. Also Phillip Klapwijk of GMFS expects fabrication demand for silver, which makes up 80 percent of total demand for the metal, to rise as much as 5% this year.
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Ever since the take-down of the price of silver in April, silver warehouse stocks have been declining in a large way at the Shanghai Futures Exchange. At the peak on April 12th, the Shanghai Futures Exchange held 1,124 tonnes of silver at its warehouses. However, just six weeks later, 360 tonnes or 32% were removed.

On May 31, 2013 there were 765 tonnes of silver at the exchange:

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Furthermore, in just a little more than five weeks later, an additional 151 tonnes of silver have been removed. Here we can see that the Shanghai Futures Exchange now only has 614 tonnes of silver at its warehouse remaining ...

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When June rolled into July, once gain, the price of silver headed lower right along with the decline in silver warehouse stocks.. Another 86 mt were withdrawn in July as inventories are now the lowest level (148 mt) they have ever been.

In a nutshell, silver inventories declined nearly 90% from their record peak set in March, 2013. ...

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On the SHFE silver is currently not in backwardation, but the contango is such low that it doesn't pay to cash and carry the metal (in short; the cost of funding spot metal plus the storage costs transcend the future price), hence SHFE silver inventory isn't being supplemented and reached a record low on August 8 of 143 tonnes.
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At the beginning of August, there were 148 metric tons of silver on warrant at the Shanghai Futures Exchange. In just three weeks, 29% of the total inventory was removed. The majority of this decline took place last week when 22 metric tons were withdrawn on Friday alone.
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