Silver Demand Drivers (and vault totals)

[pmbug]

You are asking the right questions.

 

[Voodoo]

Did you ever see or figure out why the Comex stopped reporting the deliveries each day?

 

[pmbug]

What do you mean? Which report stopped?

 

[Voodoo]

The CME Group data. The deliveries have been zero for like 2 weeks straight in every metal I checked. Gold, SIlver, Pt, even Copper

 

[68camaro]

Can TPTB effect a crash like today by dumping several weeks worth of deliveries all at once?

 

[nickndfl]

This way who is going to stand for delivery at $120 when spot is $87 now?

 

[Viking]

This way who is going to stand for delivery at $120 when spot is $87 now?

Doesn't it have to go back up, if not, the Asian market will be buying hand over fist when it opens Sunday night?

 

[pmbug]

The CME Group data. The deliveries have been zero for like 2 weeks straight in every metal I checked. Gold, SIlver, Pt, even Copper

I see. I don't watch that report. You can see deliveries from the delivery notices page:

https://www.cmegroup.com/solutions/clearing/operations-and-deliveries/nymex-delivery-notices.html

 

[pmbug]

Yesterday (1-30) in silver

Yesterday silver plummeted from ~$102 to ~$75 before recovering to $85. Was it Mr. Slammy's last hurrah? We look below the surface (a thread)

COMEX 1-29​

23K ozt (0.7 tons) deposited in CNT

2.4M ozt (74.3 tons) withdrawn from Asahi (162K), CNT (1.1M), JPM (965K), Loomis (134K)

272K ozt (8.5 tons) moved from [E] to [R] in CNT

3.5M ozt (110.4 tons) moved from [R] to [E] in Asahi (35K), Brinks (944K), JPM (1.6M), MT&B (929K)

COMEX Commentary​

Heavy withdrawals continued Thursday as expected. Silver moving from [R] to [E] picked up again. Based upon the 60% [R] drain rate metric observed Oct-Dec, an average withdrawal rate of 2.5M ozt (it's been 2.9M over the last two weeks), 105M ozt [R] would be depleted in 70 working days (14 weeks - ~3.5 months)

EFP spread​

With a current spot price of $85.33, EFP spreads:

Feb26 = -$0.56 vs -$2.55 Yesterday
Mar26 = -$0.08 vs -$0.59
Apr26 = +$0.13 vs -$0.38

EFP Commentary​

EFP spreads have settled with a positive shift although Feb26 EFP spread is still negative. CME margin increase on the way. That should help keep Feb26 EFP spread in the negative (so COMEX silver continues flowing to London/LBMA).

China ​

Per @TheMetalCharts website:
SGE $122.24 (no VAT)
SFE $114.90

SGE closed for trading before the slam. We'll have to wait for Sunday night / Monday morning to see where it finds equilibrium.

India ​

Spot : $113.07 (less tax = $102.89)
MMTC-PAMP (retail) : $114.15 (less tax = $103.88)
Feb26 [SILVERM 5kg] : $105.90 (less tax = ~$99.54)
Mar26 [SILVER 30kg] : $99.04

Feb-Mar spread blew out!

SLV Share Lending​

4.2M Shares available

Borrow fee up from 0.60% to 0.70%

Available shares are disappearing it would seem! Will they reload Monday morning?

SLV Assets​

Blackrock: No change
JPM: No change

Did they hit they brakes? Or did they decide not to report the day's activity? I'm guessing the latter.

PSLV​

Zero units change
Zero ozt change

PSLV units/ozt ratio still sits at .3413 (8th day in a row). They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio. Are they having trouble sourcing the silver?

Big Picture​

SGE ($122.24) (closed pre-slam)
SFE ($114.90)
Retail ($103.88)
MCX ($99.54)
spot ($85.33)
COMEX Feb26 ($84.77)

- Feb26 EFP spread still negative
- COMEX(LBMA)
- SLV ???
- PSLV still needs ~1.3M ozt

ICYMI:​

 

[pmbug]

ETFs with LBMA vaulted silver stock weekly change (in tons):

through Thursday: -711.6
through Friday: -780
Friday: -68.4
weekly avg: -156 /day

The outflow slowed down to end the week/month. LBMA monthly report due on Feb 6 will likely be quite silly (showing massive increase in vault stock). I expect the piper will need to be paid in Feb-tober though.

 

[pmbug]

Monday morning in silver

This morning silver fell from ~$85 to the low $70s before recovering to ~$83.60. India and China have both begun trading with increased margin limits. We look below the surface (a thread)

EFP spread​

With a current spot price of $83.67, EFP spreads:

Feb26 = -$3.87* vs -$0.56 Saturday
Mar26 = -$1.12 vs -$0.08
Apr26 = -$0.59 vs +$0.13
*Feb26 data was 1 hour old

EFP Commentary​

CME hiking margins again today. Real time quote wasn't available for Feb26 when I looked. However, given the Mar26 and Apr26 EFP spreads shifting negative, it is a safe bet that Feb26 also shifted deeper negative (as I expected when margin hikes were announced). COMEX silver should continue flowing to London/LBMA.

China ​

SGE $104.81 (no VAT)
SFE $111.13

SGE premium to LBMA spot = $21.14

SFE 243K ozt (7.5 tonnes)

SFE has a net inflow for the first time 2 weeks.

India ​

MMTC-PAMP (retail) : $95.82 (less 10% taxes = $86.23)
Feb26 [SILVERM 5kg] : $89.82 (less 7.2% taxes = ~$83.35)
Mar26 [SILVER 30kg] : $87.39

Feb-Mar spread cut in half from Friday. India markets seem to be tracking the West now instead of China.

SLV Share Lending​

10M Shares available

Borrow fee 0.70%

As expected, available shares reloaded this morning and ready for plunder.

Big Picture​

SFE ($111.13)
SGE ($104.81)
Retail ($86.23)
spot ($83.67)
MCX ($83.35)
COMEX Feb26 ($79.80) (1 hour old quote)

- EFP spreads deeply negative (COMEX silver must flow [to LBMA])
- China held above $100
- India mirroring the West

ICYMI:​

 

[Voodoo]

It's interesting that the Chinese prices held up much better than India. Guess that tells us from where the real demand is emanating.

 

[pmbug]

I learned after posting my morning report that Chinese prices held up mostly because they hit limit down and trading was halted. I don't think we have found a new equilibrium just yet.

 

[Voodoo]

Not sure how accurate this site is but its one I've been searching for for some time.

China Silver Price Today in USD | Shanghai Premium - MetalCharts

Track the China silver price in dollars (USD) in real-time. Live SGE prices converted to US dollars for easy comparison with Western spot prices.

metalcharts.org

 

[pmbug]

Singapore contact on X that I trust is very critical of that site's data claiming it is not accurate (for China/SGE/SFE anyway).

 

[pmbug]

Yesterday (2-2) in silver

Silver fell from ~$83 to ~$76 before recovering to ~$80 before rising above $86 in the morning hours. Below the surface there are huge movements of physical (a thread)

COMEX 1-30​

1.2M ozt (37.6 tons) deposited in Brinks

1.4M ozt (43.5 tons) withdrawn from Asahi (541K), CNT (605K), JPM (212K) et al

862K ozt (26.8 tons) moved from [R] to [E] in Asahi (95K), Brinks (39K), CNT (268K), Delaware (79K), JPM (341K), MT&B (30K), StoneX (10K)

COMEX Commentary​

Relatively light withdrawals Friday (crash/turmoil day). Given the deeply negative EFP spreads throughout the day yesterday, I'm guessing the withdrawals are going to accelerate.

EFP spread​

With a current spot price of $86.78, EFP spreads*:

Feb26 = -$0.77 vs -$3.87 Yesterday
Mar26 = -$0.41 vs -$1.12
Apr26 = +$0.92 vs -$0.59
*all futures data was 10-15 minutes old

EFP Commentary​

The half life on the CME margin hike suppressing futures vs spot looks to be about a day (again). Feb26 EFP spread is still negative, but narrowing.

China ​

SGE $96.81 (no VAT)
SFE $96.12

SGE > SFE
SGE premium to LBMA spot ~$10

SFE 417K ozt (13 tonnes)

Yesterday's inflow looks like an anomaly

India ​

MMTC-PAMP (retail) : $99.99 (less 10% taxes = $89.99)
Feb26 [SILVERM 5kg] : $94.60 (less 7.2% taxes = ~$87.79)
Mar26 [SILVER 30kg] : $92.29

India markets slightly elevated over the West, but far below China presently

SLV Share Lending​

8.8M Shares available

Borrow fee down from 0.70% to 0.67%

IB reporting a lot of activity with share borrowing now.

SLV Assets​

Blackrock: 36.3M shares
JPM: 32.9M ozt (1,023.2 tons)

In the previous 5 weeks, with a rising spot price, SLV was shed 28.5M ozt (886.6 tons). This silver almost surely raided by APs using borrowed shares (buying the shares would have driven up the price).

Yesterday, after Friday's slam to spot price, SLV recouped the drain of the last 5 weeks and more. Seems to me like the APs took advantage of the slam to buy silver from weak hands cheaply in order to pay back their borrowed SLV shares.

Note that the SLV drain (LBMA gain) concluded at the end of January. Very convenient for LBMA monthly vault stock report to look good with SLV silver that disappeared immediately on the first trading day of February (after the cut-off reporting date).

PSLV​

3,437,232 units
1.1M ozt (35.5 tons)

First substantial drawdown in PSLV inventory I've seen since I started watching it closely in June 2025. Units/ozt ratio still sits at .3413. PSLV still needs to add 1.3M ozt (40.5 tons) to get back to the historical .3434 ratio. Is PSLV being raided now?

Big Picture​

SGE ($96.81)
SFE ($96.12)
Retail ($89.99)
MCX ($87.79)
spot ($86.78)
COMEX Feb26 ($86.01)

- Feb26 EFP spread firmly negative
- COMEX(LBMA)
- SLV (LBMA)
- PSLV

ICYMI:​

~~~

China/SGE night session update:

 

[pmbug]

Last week in silver (in metric tons):

SGE silver vault - 11.3
SFE silver vault - 126
SLV London vault - 566.6
PSLV silver vault - 0.03
COMEX silver stock - 296.9
LBMA silver stock - ??? (no daily or weekly data because LBMA is run by dinosaurs)

Global net change (less LBMA):
Jan 26-30 = 1,000.77
Jan 19-23 = 374.4
Jan 12-16 = 446.4
Jan 5-9 = 659.7
Dec 29-Jan 2 = 160.6
...

China's SGE reported another relatively low outflow for last week - about 1/10th of the weekly outflow for previous weeks. Is China receiving silver from the LBMA? Maybe...

SGE silver price premium to LBMA spot down from the extreme highs of last week (~$20), but still elevated (~$12). Falling premium would suggest that China is receiving at least some LBMA silver.
SGE (spot) price is still > SFE (futures) price, but the difference has narrowed.

PSLV was again very quiet last week. The "inflow" was likely just an accounting adjustment (when they actually weigh new bar inventory, it isn't exactly 1K ozt. They have been short ~41 tons to maintain their historical units/ozt ratio for over two week now. Are they having trouble sourcing London Good Delivery silver bars? Every 1K ozt they add is a London Good Delivery bar that becomes unavailable to the LBMA for clearing OTC market trades.

Last week marks the 4th week in a row for the COMEX to drain profusely (~300+ tons). The Feb26 EFP spread was firmly negative all week, so the COMEX draining was expected as bullion banks are likely shipping COMEX silver to London.

SLV vault stock got monkey hammered last week. See here for important context on the SLV story. SLV is the emergency relief valve for the LBMA - raided for its vault stock when the LBMA gets into a pinch. It appears there is significant raiding of vault stock at several silver ETFs that maintain vault stock at the LBMA.

One can only imagine what chaos might be unfolding in the LBMA's London vault system right now. We can only imagine because the dinosaurs at the LBMA do not provide daily/weekly reporting of their vault stock like every other market and major fund in the world.

 

[foolsgold]

pmbug do these blue down arrows indicvate outflows of Ag in your comments above?

 

[pmbug]

Yes. Down is a drain/outflow. Up is a gain/inflow.

 

[pmbug]

The LBMA's December silver stock report was overstated (for the 3rd month in a row) by at least 1,575 tonnes.

From the chart (quoted below), India imported:

~70 metric tons from the UK (London/LBMA)
~80 metric tons from China (SGE/SFE)
~110 metric tons from Switzerland (could be recast metal from UK or China)
~110 metric tons from UAE and "Other" which could also be indirectly from UK, China and/or COMEX

Total import was on the order of ~370 metric tons - way down from Nov/Dec.

The SGE/SFE gained 219 metric tons in December. If China also exported ~80 metric tons to India, that means China was likely a net importer (presumably from London).

The vault flows for December break down like so:

COMEX drain = 193.5 tonnes (possibly sent to London)
SFE/SGE gain = 299 tonnes (possibly imported from London)
SLV/ETFs gain = 1068 tonnes (definitely drained from London)
India gain = 70 tonnes (definitely drained from London)

Even assuming 100% of COMEX drain went to London and 100% of SFE/SGE gain did not come from London in December (which is not reasonable), the LBMA should have reported a drain of 944.5 tonnes instead of a gain of 631 tonnes. The LBMA's December report appears to have overstated their silver vault stock by at least 1,575.5 tonnes.

 

[pmbug]

The LBMA is due to report their end of January silver stock report on Friday, Feb 6. I fully expect them to report another ridiculous number. In the meantime, we know some of the variables to the free float equation and we can play at estimating the others:

X = A - B + (C * D) - E - F

X = LBMA free float vault stock (end of January)
A = (27,818 Official | 24,994.5 Realistic*) LBMA vault stock (end of December)
B = (20,957 + 1,023**) ETF vault stock
C = (1,370.91) COMEX withdrawn for January
D = An estimated percentage of COMEX withdrawn that was shipped to London
E = Export to China (SGE/SFE) in January
F = Export to India in January

*Realistic​

25,939 November realistic estimate - 944.5 drain

COMEX​

It is unreasonable to assume that 100% of the COMEX withdrawals across the entire month were shipped to London. I think 90% for a high side conservative estimate would be reasonable. Plugging 90% in for "D" yields 1,234 metric tons.

**ETFs​

SLV added 1,023 tons on Feb 2. That's 1,023 tons that end of January ETF totals won't count, but really were not LBMA free float IMO as it likely represents repayment of shares borrowed throughout January.

China​

SFE silver vault drained 236 metric tons in January. SGE silver vault drained 280 metric tons in January. I think it fair to estimate that China did not export silver to London. Given the persistent SGE premium to LBMA spot, China is likely to have received silver from London. It is really difficult to estimate how much silver China may have imported from London. Let's be conservative and estimate that the LBMA exported nothing to China in January (E=0).

India​

India reportedly (per Metals Focus) imported :
~480 metric tons from the UK (~1,600 tons total all sources) in October
~390 metric tons from the UK (~750 tons total all source) in November
~70 metric tons from the UK (~370 tons total all source) in December

Given that Indian silver markets have tracked China through January (at a premium to the West), it seems safe to estimate that likely did not receive much silver from the LBMA (maybe 20-30 tons is realistic?). Let's be conservative and estimate that the LBMA exported nothing to India in January (F=0).

LBMA​

The following conservative estimates are upper bound base cases for LBMA vault stock assuming the LBMA exported nothing to China and India. They are likely overshooting as the LBMA probably did export at least some silver to China and/or India, but we have no idea how much yet. You can fiddle with the variables to suit your own ideas:

Feb 6 LBMA silver vault stock report will likely reflect:
Vault stock = 27,818 + (1,370.91 * 0.90) - 0 - 0 = 29,052 tons

My realistic free float estimate:
Free float = 24,994.5 - 21,980 + (1,370.91 * 0.90) - 0 - 0 = 4,248.5 (versus 3,554 tons last month)

4,248.5 metric tons is ~136.6M ozt. The LBMA ran into trouble in October when their free float was in the range of 110M ozt. As silver lease rates have been falling recently, it makes sense that the LBMA free float has some cushion at the moment.

If you want to see how ridiculous the LBMA report is on Friday, compare their report to:

29,052 tons (estimated based upon their already ridiculous report from last month)
27,173 tons (estimated using last month's realistic estimate [with import/export data])

We'll see what they say on Friday!

Final thought​

I'm estimating the LBMA's *liquid* free float (136.6M ozt total FF - 110M ozt illiquid FF) for silver to be in the neighborhood of 26.6M ozt. At at spot price of $100, that's only ~$2.7B.

 

[Voodoo]

I don't think they even hide SLV ownership. They know and I think even count it as their OWN silver. So SLV silver IS LBMA Silver.

 

[pmbug]

Yesterday (2-3) in silver

Silver fell from ~$86 to ~$85 during the day and has risen to $90 this morning. Below the surface, currents are swirling (a thread)

COMEX 2-2​

14K ozt (0.4 ton) deposited in CNT

1.8M ozt (57.7 tons) withdrawn from HSBC (399K), JPM (1.2M), StoneX (120K) et al

271K ozt (8.4 tons) moved from [E] to [R] in MT&B

1.2M ozt (37.9 tons) moved from [R] to [E] in Brinks (1.1M), CNT (111K)

COMEX Commentary​

Withdrawals almost back to 2M+/day on Monday. I actually was expecting more than that given the deeply negative Feb26 EFP spread throughout the day Monday. The COMEX->LBMA garden hose continues to flow.

EFP spreads​

Current spot price: $90.52

Feb26* = -$1.00 vs -$0.77 Yesterday
Mar26 = -$0.60 vs -$0.41
Apr26 = -$0.22 vs +$0.92
*futures data was 4+ hours old

EFP Commentary​

All EFP spreads appear to have drifted a bit more negative this morning. The faucet for the COMEX->LBMA garden hose remains wide open.

China ​

SGE $105.59 (no VAT)
SFE $105.37

SGE > SFE (barely!)
SGE premium to LBMA spot ~$15

SFE 849K ozt (26.4 tonnes)

Vaultspremium=LBMA non-delivery?

India ​

MMTC-PAMP (retail) : $105.75 (less 10% taxes = $95.18)
Feb26 [SILVERM 5kg] : $101.35 (less 7.2% taxes = ~$94.06)
Mar26 [SILVER 30kg] : $98.30

China >> India > LBMA/COMEX

SLV Share Lending​

10M Shares available

Borrow fee down from 0.67% to 0.48%

As expected with the influx of new shares yesterday, there are plenty of shares available to plunder and the borrow fee dropped a bit.

SLV Assets​

Blackrock:3.6M shares
JPM:3.2M ozt (101.5 tons)

SLV sheds 10% of yesterday's historic inflow. The raiding continues.

PSLV​

1,183,374 units
200K ozt (6.2 tons)
Units/ozt ratio .3410

PSLV needs 1.5M ozt (46.8 tons) to get back to the historical .3434 ratio.

Big Picture​

SGE ($105.59)
SFE ($105.37)
Retail ($95.18)
MCX ($94.06)
spot ($90.52)
COMEX Feb26 ($89.52)

- Feb26 EFP spread firmly negative
- COMEX(LBMA)
- SLV (LBMA)
- PSLV

ICYMI:​

 

[68camaro]

Failures are almost always complicated in details, even if they are predictable in hindsight.

 

[pmbug]

Update: LBMA realistic vault stock estimate

When I calculated the "realistic" LBMA vault stock for December, I had estimated the LBMA would export 300 tons of silver to India. We now know they only exported ~70 tons. I forgot to update my December estimate when calculating a January estimate yesterday. So, a small adjustment is in order:

Realistic Dec25 LBMA vault stock
25,939 + 230 = 26,169

Realistic Jan26 LBMA vault stock
26,228.5 + 230 = 26,458.5