Silver’s Two-Speed World: Chinese Vaults Post Largest Weekly Inflow in Two Years While India Drains 60% From June Peaks
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The global silver market is fragmenting into two distinct narratives. In China, vaults are being restocked at the fastest pace in over two years as institutional buyers accumulate physical metal through SHFE’s registered system. In India, warehouse stocks are falling sharply as hedged positions roll off and bullion dealers draw down inventories ahead of seasonal restocking in August. These two dynamics are telling very different stories about directional conviction — and where the weight of physical demand is actually sitting.
InProved Terminal’s Silver Vault Monitor (updated July 31, 2026) shows total combined SGE and SHFE silver vault stocks at 2,121.5 metric tons, with a daily inflow of +10.2 tonnes. The weekly build is +212.4 tonnes and the 30-day cumulative net inflow stands at +286.3 tonnes. Breaking down by exchange: SGE holds 930.1 tonnes and SHFE holds 1,191.4 tonnes.
The SHFE leg of this inventory build represents the largest single weekly inflow in more than two years, with week-on-week inflows of +212.4 tonnes (+6,830,040 oz) confirmed in InProved Terminal’s SHFE data feed. The daily delta of +10.2 tonnes on July 30 confirms the build is ongoing, not a batch event from a single delivery cycle.
Looking at the 6-month stock trend, the combined SGE+SHFE position fell from approximately 2,500 tonnes in May 2025 to a trough near 1,000 tonnes before recovering sharply. The current reading of 2,121.5 tonnes represents a near-complete V-shaped recovery in vault stocks — yet the double-digit SGE premium (discussed below) tells us this restocking has not relieved the underlying physical tightness in the market.
SHFE-specific silver stocks stand at 1,191.4 metric tons (38,303,499 oz) as of July 30, with a daily delta of +10.185 tonnes (+327,455 oz) and weekly delta of +212.438 tonnes (+6,830,040 oz). The chart below shows the full historical context: SHFE silver peaked above 3,000 tonnes in 2021, then fell relentlessly to a generational low under 300 tonnes in mid-2025 before beginning the current recovery.
The weekly inventory change bars in the lower panel confirm the current inflow is not episodic. The build has been sustained and accelerating — the largest single-week inflow in over 24 months. Whether this signals demand relief or new accumulation ahead of the next price leg depends significantly on what happens to the premium, which remains near cycle highs despite the restocking.
If the vault restocking trend raises questions about whether the tightest conditions are behind us, the Shanghai Gold Exchange silver premium answers: no. As of July 30, the SGE silver premium over LBMA spot sits at +12.31%, with a 5-day average of +12.12% and a 30-day range of +9.51% to +12.99%. The SGE silver equivalent is $64.30/oz (USD-eq) against LBMA’s $57.25/oz — a spread of over $7.00/oz.
A sustained double-digit premium at the SGE signals that Chinese buyers are willing to pay significantly above international benchmarks to access physical delivery domestically. This kind of stickiness — holding above 9.5% for the full 30-day window — indicates structural demand that cannot be satisfied simply by routing more LBMA silver eastward.
Crucially, this diverges from gold. Gold’s China premium collapsed to near-zero this week (+0.02%), suggesting arbitrage flows for gold have normalised while silver remains structurally tight on the mainland. The two-metal premium split is the clearest cross-market signal in precious metals this week.
While Chinese vaults are being restocked, India’s MCXCCL silver warehouse stocks are undergoing their sharpest decline of the year. Total deliverable silver at MCXCCL stands at 113,154.65 KG (3,638,006 oz) as of July 30 — down 60% from the 290,000 KG peak reached in June 2026.
Week-to-date, India silver stocks fell -0.81%, with the month-to-date decline reaching -22.74%. The breakdown: Silver Bar 53,160.14 KG, Silver 100 2,648.10 KG, Silver Micro 57,346.41 KG. The drawdown concentrated in Micro contracts suggests retail and mid-tier dealer destocking, not large-lot institutional liquidation.
India’s drawdown is running in precisely the opposite direction to China’s vault build. When these two inventory trends diverge simultaneously, physical pricing tension tends to be most acute — and China’s +12.31% premium is confirming exactly that.
MCX SilverM options have surged from 9.3 million lots in 2025 to 106.6 million lots in 2026 — an 11x year-on-year increase. Standard Silver options also grew from 5.6M to 15.3M lots. MCX total bullion (Gold + GoldM + Silver + SilverM) reached 344.4 million lots YTD 2026 vs 65.7M for full-year 2025 — a +424% year-on-year surge. The fact that options volumes are leading this growth indicates participants are using structured exposure rather than outright futures — a maturing market.
For Bullion Dealers: The Indian physical drawdown of 60% from June highs creates restocking pressure ahead of Q3 festival demand. With the SGE silver premium stubbornly above 12%, LBMA-routed silver supply is not solving the China tightness — which means the arbitrage channel into India may face price competition from eastward flows. Monitor the premium: if it holds above 11% through August, Indian import demand may re-accelerate faster than current pricing implies.
For Conservative Investors: The InProved Terminal Silver Vault Monitor reading of 2,121.5 tonnes combined (SGE+SHFE) is constructive for silver’s medium-term case. A 30-day premium band of +9.51% to +12.99% is unusual and typically precedes sustained price support. Scaling into physical silver positions at LBMA $57 is arguably better risk/reward than chasing gold at near-zero China premium — the structural demand signal in silver is measurably stronger right now.
For Traders: The divergence between China’s silver premium (+12.31%) and gold premium (+0.02%) is the sharpest inter-metal premium spread InProved Terminal has recorded this cycle. This supports gold-silver ratio compression plays — long silver, short gold — particularly on COMEX where the ratio is directly tradeable. On MCX, the 11x explosion in SilverM options participation creates liquidity depth that was not available 12 months ago. Watch the 30-day premium floor: if SGE silver drops below +9.5%, the compression trade loses its asymmetry.
Hugo Pascal’s observation about the AU9999 contract hitting a 10-week volume high underscores the increasing significance of physical gold trading on the Shanghai Gold Exchange. This trend not only highlights robust domestic demand in China but also reflects broader shifts in the global gold market toward physical-backed assets.
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