Shanghai Silver Stocks Fall To Lowest Level On Record

Something interesting is taking place on the Shanghai Futures Exchange as silver warehouse stocks fell to their lowest level on record.  In March of 2013, the Shanghai Futures Exchange held 1,143 metric tons of silver in its warehouses.

If we take a look at the chart below, we can see that after the precious metal take-down on April 12th, 2013… silver stocks continued to be drained from the Shanghai Futures Exchange.

Shanghai Silver Stocks 2013

In just seven months, total silver inventories declined from a peak of 1,143 metric tons to 391 (mt) metric tons in November that year.  Even though silver stocks continued to decline in 2014… withdrawals were small.

Then from April 18th to April 25th withdrawals picked up once again.  Here we can see that in just one week, silver stocks at the Shanghai Futures Exchange declined from 331 mt to 258 mt.  For the past two months, the silver warehouse levels remained virtually flat with small additions and reductions.

Shanghai Future Exchange Silver Stocks April 2014.jpg new

However, this past week, we have seen a constant drain of silver stocks at the Shanghai Futures Exchange with a whopping 29 mt (12%) withdrawal today (Thursday).

Shanghai Silver Stocks June-July 2014 NEW

So, in just 15 months, the silver warehouse stocks at the Shanghai Futures Exchange declined 82% from 1,143 mt to the present 200 mt.  With all the Chinese metal rehypothecation problems currently taking place, it will be interesting to see how this unfolds throughout the summer.

Hope everyone has a Happy Fourth of July Holiday.  We must enjoy our holidays when we can get them.  Who knows how financial and economic events will impact our lives in the future.

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17 Comments on "Shanghai Silver Stocks Fall To Lowest Level On Record"

  1. Steve,

    these fantastical moves are happening across the board…it’s not just PM’s. This is very late stage stuff…consider the below…

    Being the nerd I am I pulled the ’07 and ’14 BLS archives to compare / contrast. Far worse than I even imagined…

    Dec ’07 —> June ’14 (78 months or 6.5 years)
    •US added 10,000 jobs…not million or hundreds of thousands…JUST 10k JOBS!!!
    •The US population rose by 16 million citizens in this same period.
    •And shock, not in labor force rose by 13 million over this time.

    …and the Fed’s “full” employment mandate is nearly met @ 6.1% !?!

    2007 BLS release http://www.bls.gov/news.release/archives/empsit_01042008.pdf

    Civilian non-institutional population = 233,156,000

    civilian labor force = 153,667,000

    employment = 146,211,000

    not in labor force = 79,270,000

    2014 BLS release http://www.bls.gov/news.release/pdf/empsit.pdf

    Civilian non-institutional population = 247,814,000 (+14.7 million)

    civilian labor force = 155,421 million (+1.8 million)

    employment = 146,221,000 ( +10k JOBS… )

    not in labor force = 92,120,000 (+12.9 million)

    US population rose from 302 million to 318 million over this period…+16 million people!!!! Apparently all the young retired to make way for the old to keep on working???

    The Federal Debt rose by $7.8 Trillion or $780 Million per job added!!! Or 1 job created for every 1,600 new entrants to the economy…but luckily they all went to the “not in labor force” holding tank. Hyper-monetization is well under way.

    • Outlookingin | July 3, 2014 at 5:06 pm | Reply

      Chris, those are some great stats! Thank you for digging them out. Amazing!

      Steve,

      As an addendum to your post, the silver stock – to – flow ratio has been steadily falling for the past 63 years! Ever since 1951. At current production levels, it would take 52 years to double the total stock now available. With falling ore grades and an ever increasing EROI and ever diminishing energy (oil) supply, along with the current low price for silver, I foresee an acute shortage of physical silver, which could translate into $843.75 per ounce in the not to distant future! An equivalent price for gold would be north of $13,500.00 per ounce.

      • Chris,

        Everything you wrote is true but it won’t change anything : indeed like USSR the system can continue for years or even decades if no alternative financial system is put in place (China/Russia team is surely the most probable candidate).

        They can cantinue to expand credit and Financial prices assets and even if the working poor class is expanding fast, they will still show good “economic numbers” and huge propaganda.

        • RD,

          Again, you forget the impact of DECLINING NET OIL EXPORTS. In 2005, ANE- Available Net Oil Exports fell from 41 mbd (million barrels per day) to 35 mbd in 2012. ANE includes the consumption of the top 33 Exporters plus China & India. So, the remaining 155 importing oil countries now have 6 mbd less to consume.

          And… this only gets worse as time goes by. The 2014 BP Statistical Review just came out and the numbers weren’t pretty. Most regions stated higher consumption and less NET OIL EXPORTS. This is a double-edged sword in which no one except a few analysts such as Jeffrey Brown are looking at.

          ANE- Available Net Oil Exports are forecasted to decline to the 28-30 mbd figure by 2020. Again, this figure will fall at a higher rate after 2020.

          steve

  2. Chris thanks for the work, I was almost believing the jobs #s. I knew it was b.s. but thanks to you i now know why. I don’t really care what their #s are. It’s all too late. The damage done is irreversible. There will be stories told in the future about america that will begin “Once upon a time”

  3. It seems there are some pretty ambitious plans in regards to solar power coming from many countries. I wonder if this will affect silver supply in the near future.

  4. Yes indeed… as this recent piece explains http://monetaryrealism.com/china-asks-how-much-will-it-cost-us-to-make-solar-cheaper-than-coal/
    the Han are serious about the solar project.
    Silver solar panels
    current… currencies…
    as in energy and monies… interesting how language always points us in the right direction if we take the time to understand it’s meaning.

  5. And yet the SFE doesn’t simply replenish stock by buying more silver. There can only be one reason why, they don’t want to. Why wouldn’t they want to? Same reason they’re trying so hard to disguise their gold purchases that’s why.
    Market is far too tight for large purchases. There will always be a coin dealer nearby to sell you 20 ounces, but if you want 2000 tons, that’s a different matter.

  6. shanghai gold exchange disclosed silver COT for the first time.

    as of june 27, 40% of shorts are held by ICBC retail clients. at the same time, 26% of longs are held by ICBC retail clients.
    so at ICBC bank, the biggest silver trading venue in china, retail long to short is 2:3.

    on the long side, one of the biggest gold producer in china is holding 8% of oustanding silver longs!

    again, i’m probably the first one to relay this info to the western media!

    • judejin,

      Been a while, good to see you commenting again. Yes, it was interesting to see such a large drop on the Shanghai Silver Stocks. Furthermore, thanks for the data on silver short-long holders.

      steve

  7. china’s solar dream has one big problem: silver shortage.

  8. rogue, my infomation is 10x more interesting than your stuff. 8 )

  9. Additionally, somebody removes big time silver from the SLV.
    According to Harvey Organ’s numbers somebody removed 10.17 million oz or 327 metric tons from SLV since start of June.

  10. The bottom line is I think were all getting Shanghaied.

  11. Excellent post. This is information that not only is not in the mainstream precious metals analysis, it’s not mentioned at all in precious metals dedicated blogs/news sources.

    Great job, Steve

    • Dave,

      Thanks for stopping by. We also appreciate the analysis you provide at your site and through your videos.

      steve

  12. Steve,

    I appreciate your indepth analysis on EROI! The swift decline in silver inventory can mean multiple things all of which is very bad news. Reading between the lines I would be surprised if something significantly ECON doesn’t break within 12 months.

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