Shanghai Silver Stocks Continue to Decline

In a little more than half a year, the Shanghai Silver Stocks have declined to new record lows.  Before the huge take-down in the price of silver in April, there were 1,120 tonnes of silver at the Shanghai warehouses.  By the end of May of this year, the silver stocks fell 32% to only 765 tonnes.

This is a snapshot of the Shanghai silver stocks on April 12th 2013:

Shanghai Silver 41213

and here is the end of May:

shanghai Silver Stocks 53113

By the first week of September, the silver stocks declined another 307 tonnes to hit a new low at 458 tonnes:

Shanghai Silver 90613

What is surprising here is that as the Shanghai silver warehouse stocks have fallen substantially in less than 5 months (April 12th-September 6th), the Comex silver warehouse stocks basically remained in a tight level of 162-166 million oz shown in the chart below:

Comex Silver Inventories 102313 Chart

In their most recent update, the Shanghai silver stocks have declined another 30 tonnes since the September 6th update:

Shanghai Silver 102313

In a little more than a half a year, the silver stocks at the Shanghai warehouses have declined 692 tonnes or 62% of their total before the April 12th silver & gold price take-down.  It is quite interesting that the silver inventories in Shanghai continue to decline, even though at a slower pace in the past month, while the Comex silver levels remain about the same as they were in April.

Lastly, there are some very interesting trends taking place with U.S. scrap silver exports that I will discuss in a later article.  Let’s just say, silver scrap from the United States is showing some significant changes in the amount and type that is being exported.

Please check back at the SRSrocco Report as more updates will be coming.

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14 Comments on "Shanghai Silver Stocks Continue to Decline"

  1. So are you implying the COMEX silver figure should show similar trend as Shanghai warehouse with the take down of silver price?

    • Joe,

      From what I understand, part of the silver at the Comex is for storage for ETF’s such as the SLV. It’s really a mystery as to how the Comex functions and we don’t know if indeed the figures that they show in their inventories are actual real physical bullion.

      On the other hand, I have a great deal more faith that the inventories at the Shanghai warehouses do represent actual physical bullion.

      steve

  2. Steve

    Always enjoy your articles. Would you share with your readers the source for these numbers? I’ve looked online but I can’t find much regarding Shanghai Silver stocks. I also find it interesting that Shanghai is losing silver and comex is virtually unchanged. I don’t doubt the comex numbers are correct, however, I also don’t doubt that they can’t find ways to legally double count bars in transit.

    Thanks

    Tas

  3. Steve – have you done any analysis on SLV inventories? There appears to be a pretty clear (mathematically significant anyway) correlation between GLD gold inventories shrinking to support COMEX gold inventory (as presumably, COMEX gold stocks are being drawn down for arbitrage trading to Hong Kong). Wonder is something similar might be happening with silver?

    • pmbug,

      Thanks for the reply. I have not done an analysis of the iShares SLV ETF, however, here are the supposed inventories over the time period since April 12th — the beginning of the take-downs:

      SLV Silver Inventories

      April 11 = 337,505,197.4 oz
      May 31 = 321,279,945.8 oz
      Sep 06 = 338,666,855.9 oz
      Oct 23 = 335,727,679.2 oz

      Those are the same dates as the figures I gave for the Shanghai warehouses above. You will notice that by the end of May the SLV had dropped around 16+ million oz, but by Sep 6th, it had risen back up higher than it was before the April 12th take-down.

      Presently, it’s only a few million oz lower than it was last month.

      It seems like silver was not removed from the SLV ETF during the huge price take-downs as was gold from the GLD ETF. Very interesting.

      steve

  4. Shanghai Silver Stocks Continue to Decline

    In future writings please clarify what this means in relation to the Comex or future physical shortages.

    In an interview a few months ago John Embry [someone who has knowledge of physical supply] stated he had no idea where all the silver was coming from that kept filling the Comex and other purveyors of the paper silver and other ersatz silver markets, or the amount of physical known to be sold in the world. He has mine production and recycling figures.

    • David,

      I would love to provide analysis on how this relates to the Comex or physical shortages, but I don’t have the data to give an accurate assessment. I would imagine Embry is speculating as he doesn’t have all the facts either. Basically, no one has the real data to state what it is taking place in the physical silver market. It’s mostly speculation.

      Of course Jeff Christian will be the first to provide data showing that there will be more supply and less silver demand in the next few years which is bearish for the price of silver. But, he is going by analysis that will become worthless going forward.

      Remember, Supply & Demand figures are meaningless in a rigged market.

      Regardless, there won’t be enough physical silver to go around in the future when the revaluation occurs. Only a fraction of investors will be able to get physical silver.

      I will get into more about this in future articles.

      steve

      • I’ve communicated with the director of operations of a huge gold and silver dealer we both like [you have linked to some of their articles]. He assures me the physical supplies are getting strained even if most don’t know it or admit it. Big volume dealers know what they have been seeing. Sure sentiment may be down a bit right now due to price smashes, and it may be that way until the shortages force physical prices up.

        If the manipulators won’t let off any steam [pressure] with a managed retreat on prices, when the volcano blows prices will go up on silver by significant percentages each day. And it may look like compounding interest increases. By prices I am referring to physical selling prices. The Comex/ETF prices may look like the posted prices on a abandoned gas station from a decade ago; they will be irrelevant when miners, refiners, and wholesalers ignore spot prices.

        For now the Comex has its’ supply chain of large delivery bars [400 ounces I think?]. I guess they have contracts in Mexico, Peru, or other impoverished nations they can “steal” natural resources from, as they are so cash/currency starved.

        • FYI, the Comex uses 100oz bars and 1kg bars for gold delivery and 1000oz bars for silver delivery. 400oz bars are mainly used in London. Since the Chinese and the Indians are the biggest buyers in the gold market, kg bars are becoming the norm.

  5. My thoughts are that the Comex is fradulent in more ways than we care to believe. We had 13 regulators in place before the 2008 crisis began.

    None had sounded a warning.

    What makes one think their is any truth today? Only intervention.

  6. TRUE COLORS;

    The CPM Group, through their misinformation mouth piece, Jeffrey Christian, has now come forward (at the Seattle silver conference) and publicly vilified Andrew Maguire. Calling him, in essence, a phoney and that any of his previous pronouncments as being false. A short announcement by Andrew Maguire calls these comments “spurious” and that an answer from him will be coming forthcoming shortly.

    The CPM Group (UK based) is owned by Omnicom Group (US based) with over 130,000 employees worldwide and with very close ties to the global financial sector, TBTF’s, including central banks. Jeffrey Christian’s remarks invariably make their appearence through “MarketWatch” which is owned by “The Wall Street Journal” which in turn is owned by the CME Group which in turn owns the COMEX! Very cozy indeed!

    This ‘hatchet attack’ comes on the heels of Eric Sprotts open letter to the World Gold Council (which operates through the largess of the LBMA) calling into question their inaccurate data, concerning gold and silver world supply figures. This personal attack by Christian on Maguire, smacks of an attempt to misdirect and cover the scene of the crime in a thick smoke screen. While in the same breath, attempting to discredit the revealing manipulative information brought forward by Andrew Maguire.

    The CPM Group, the WGC, LBMA, the Omnicom Group, the CME Group, appear to have a many facetted conflict of interests, to be shown as “lily white” rather than their “true colors” which may be described as pure as New York Cities driven snow in mid-Winter!

  7. Their price mechanism will soon be null and void. In one swift kick a large entity like China or the Saudi’s now,cab come in and wipe them out. Remember it was the Saudis back in the 70’s who were the big buyers in the end.

    • Yes, but remember the 1973 oil embargo crisis. When the Saudis turned the tap back on, at a much higher price, their balance sheet balooned hugely with paper US dollars. The Saudis were becoming concerned.

      Meanwhile the price of gold, after dipping in the mid seventies began its run to the 1980 top. Near its top, the Saudis bacame very alarmed at the sheer mountain of paper USD and the weakness of the American dollar.

      So they (Saudis) asked for gold in return for all that paper. The US said yes and traded VERY expensive gold for the mountain of paper. Well, guess what happens? The price of gold then severely tanks!

      The US then proceeds to sell the Saudis top of the line military hardware and takes the cheap gold in payment! All the while paying for the oil shipments in paper dollars again!

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