The West Rebuilds While the East Pays Up
Start with the number that spooks people. Silver held in COMEX warehouses that is actually pledged to settle futures contracts, the category exchanges call “registered,” climbed to about 93.0 million ounces on the July 6 report, against 233.0 million ounces of “eligible” metal (stored in the same vaults but not offered for delivery) for a combined 326.0 million ounces. Registered stock was near 82 million ounces in mid-June, so the deliverable pool has climbed by about 11 million ounces in three weeks. Read on its own, a rising deliverable pile looks like loosening.
It is not fresh metal arriving from mines. It is repositioning inside the system ahead of the active July delivery month, with eligible metal being reclassified into registered so it can settle contracts. The pool that traders watch is expanding on paper, and that is the part the West sees.
The East sees something else. On the Shanghai Gold Exchange, silver traded at a premium of high single digits over the international price at the June 30 benchmark fixes, and that gap widened to roughly 11% by early July. A premium that large is a standing incentive to pull metal toward China, though it has to be read net of local taxes, currency, and import costs rather than treated as pure scarcity. Even discounted for those, a double-digit premium is the market’s clearest live signal of where physical silver is genuinely tight.
The two pictures are not contradictory. They describe one market with two speeds. Western holders are comfortable letting metal move into deliverable inventory because their own demand is soft: the largest silver exchange-traded fund, SLV, saw net outflows of about $606 million over the past month, roughly 10 million ounces of investment selling at current prices, and US retail stayed quiet, with 2026 American Silver Eagle premiums down around $5 to $8 a coin.
Chinese buyers, meanwhile, are paying up to secure the physical metal. Layer on Beijing’s July 1 move to enforce strategic-mineral export controls, under which silver is reportedly licensed, and the direction of travel sharpens: metal is being kept inside China while the West treats it as ample.
Source: Original Article
