Silver Market 260616

[pmbug]

Jun 16 Silver Market Morning Snapshot​

SFE Futures $76.91
SGE Spot $76.66 (~$7 LBMA Spot @ 03:30)
MCX Futures $71.13
LBMA Spot $70.37
COMEX Jun26 Futures $70.07 ($0.53 LBMA Spot @ last quote)
IBJA Spot $69.68 (~$0.70 LBMA Spot)

Quotestaxes/duties

LBMA Spot ​

Yesterday silver opened under $71 and closed under $70, dipped to $59 over night and has recovered to ~$70.25 this morning.

EFP Spreads (ET)​

Spot price @ 07:22 : $70.37

Jun26 = -$0.53 vs +$0.07 Previously (spot @ 05:06 : $70.60)
Jul26 = +$0.07 vs +$0.02
Aug26 = +$0.34 vs +$0.31 (spot @ 07:10 : $70.40)

EFP Commentary​

Jun26 EFP spread moves hugely negative! This should provide a sufficient arbitrage profit for sending silver to London. Will COMEX withdrawals pick up to take advantage?

India ​

MMTC-PAMP (retail) : $89.21 (less 18.45% taxes (IGST*(CIF+BCD+AIDC)) = $72.75)
MCX Jun26 [SILVERM 5kg] : $83.68 (less 15% BCD+AISD = $71.13)
MCX Jul26 [SILVER 30kg] : $82.56
IBJA PM spot : $81.98 (less 15% BCD+AISD = $69.68)

The IBJA-LBMA spot premium flips to a discount after a few days of trading at premium.

China ​

SGE $76.66(no VAT)
SFE $76.91

SGE premium to LBMA spot = ~$7
SFE premium to SGE = $0.25

China silver market premiums on the rise this morning.


~~~

Jun 16 Silver Vaults (ozt)​

PSLV
SLV362K
COMEX599K
SFE105K
SGE637K

COMEX withdrawals are currently ~20.5% of Jun26 delivery requests
COMEX 5 DMA run rates
SFE 5 DMA run rate 71d (from 50d)
SGE 5 WMA run rate (as of Jun 12)

COMEX 6-12​

599K ozt (18.6t) in CNT



ozt moved between [E] and [R]

COMEX Run Rates​

Remaining Vault Stock = 320M ozt (85.2M [R], 234.8M [E])

Net "withdraw" rate through last 5 days = 229K/day DEPOSIT (from 33K/day)

@ 52% [R], run rate =

@ 100% [E], run rate upper bound =

@ 100% [E], run rate lower bound =

@ 100% [E] run rate mid point/avg =

COMEX Jun26​

Jun26 contract cumulative deliveries = 2,393
Jun26 contract equivalent ozt = 11,965,000
Actual withdrawals in Jun ozt = 2,454,200.65

Jun withdrawals are currently ~20.5% of Jun26 delivery requests. See here for historical context.

COMEX Commentary​

Friday's 599K ozt net deposit grew the 5 DMA deposit rate significantly as a 382K ozt net withdrawal rolls out of the 5 DMA window.

COMEX finished last week with two consecutive days with zero withdrawals.

Yesterday, delivery notices for the Jun26 contract grew by ~10% and the ratio of actual withdrawals to delivery notices remains low for the month at around the 20% mark.

SLV Share Lending​

10M Shares available

Borrow fee rises from 0.41% to 0.44%

Interactive Brokers reports minimal activity yesterday.

SLV Assets​

Blackrock:400K shares
JPM (London):3.4M ozt (104.6t)
JPMNYC):3M ozt (93.3t)
ozt/shares ratio 0.904696 (from 0.904695)

As I had expected, JPM effected their curious 3M ozt mid-month vault swap yesterday. The net result was a 362K inflow in total vault stock while the London vault stock jumps from an estimated (because they did not post a report on Friday) 398.9M ozt to 402.2M ozt.

PSLV​

units
ozt
ozt/units ratio 0.34123

PSLV sleeping again.

SFE Run Rate​

105K ozt (3.3t)
Remaining Vault Stock = 27,917,430 ozt

Withdraw rate through last 5 days = 393K/day (from 561K/day)

Run rate = 27.9M / 393K = ~71 (working) days(~3.5 months)

A 105K outflow replaces a 943K outflow in the 5 DMA window and the withdrawal rate shrinks.

SGE Run Rate​

637K ozt (19.8t)
Remaining Vault Stock = 31,241,840 ozt

"Withdraw" rate through last 5 weeks = 2.1M/week DEPOSIT (from 2.2M/week DEPOSIT)

Run rate =

~~~

Previous report: https://www.pmbug.com/threads/silver-market-260615.9033/

 

[pmbug]

Follow up comments on the Jun26 negative EFP spread:

COMEX June silver 5000 contract's EFP spread was hugely negative at -$0.53 at 5AM this morning (the latest quote as I was compiling my snapshot report). It hasn't been that large since April.

Large negative EFP spread provides bullion banks with arbitrage profit to buy COMEX June silver 500 contracts, take delivery, actually withdraw the silver and ship it to London to sell at a profit. It happens when London is having trouble satisfying demand for physical silver.

I should also note that the this happens as JPM gobbled up 3M ozt of London's silver vault stock for SLV's mid month vault swap. Looks to me like the LBMA is feeling some stress. If I'm right, silver lease rates should start rising again.