Silver’s Great Rebuild: Shanghai Inventories Surge, London Free Float Tightens, and COMEX Finds a Floor
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Silver markets are entering a new phase where inventories are no longer collapsing everywhere at once. Instead, the market is beginning to show a split structure: aggressive restocking in China, stabilization on COMEX, and renewed tightening within London’s available “free float.”
In China, inventories across the Shanghai Futures Exchange (SHFE) and Shanghai Gold Exchange (SGE) continue expanding rapidly. SHFE inventories climbed to approximately 898 tons (28.9 million ounces), while SGE inventories reached 637 tons (20.5 million ounces). Combined inventories now stand at approximately 1,506 tons, or 48.4 million ounces, marking one of the fastest rebuilding phases in recent years.
At the same time, London’s silver market is showing signs of tightening again. Despite silver prices falling 5.43% week-on-week to approximately $76.3 per ounce, LBMA ETF holdings actually increased by 267 tons to 20,636 tons. However, the estimated London “free float” — metal not tied to ETFs — declined 3.8% week-on-week, falling by approximately 8.57 million ounces to 219 million ounces.
Meanwhile, COMEX inventories appear to be stabilizing around the 315 million ounce level after months of heavy declines.
The regional pricing structure also remains firm. The Shanghai-London silver premium continues holding above 12%, even after the substantial rise in Chinese inventories. At the same time, the SHFE forward curve has shifted into a widening contango structure, while CITIC’s net position on SHFE silver has flipped from net short to net long.
These figures describe a silver market transitioning from outright depletion toward redistribution and stabilization, while maintaining strong regional demand signals.
China remains the clearest story in the silver market. SHFE and SGE inventories are continuing to rise aggressively after reaching historically low levels earlier in the year.
SHFE silver stocks have climbed to approximately 898 tons, or 28.9 million ounces, after a weekly increase of 85.7 tons and a daily increase of 21.15 tons. SGE inventories have also continued expanding, reaching approximately 637.5 tons following a six-week accumulation streak and a weekly increase of 5.7%.
Combined inventories across SHFE and SGE now total approximately 1,506 tons, or 48.4 million ounces.
The speed of the recovery has been notable. SHFE inventories alone have nearly tripled within less than 60 days, increasing approximately 260% from earlier lows.
Despite this increase, Chinese inventories still represent only a small fraction of global visible supply. Combined SHFE and SGE inventories account for less than 4% of total reported global silver stocks.
Global reported silver inventories currently stand at approximately 38,789 metric tons.
The distribution remains heavily concentrated within Western vault systems:
This concentration matters because even substantial percentage changes in Shanghai inventories still represent relatively small changes relative to total global stocks.
The majority of physical silver remains controlled through London and New York storage systems.
One of the more important developments this week has been the tightening of London’s estimated free float.
Despite silver prices declining 5.43% week-on-week to approximately $76.3 per ounce, LBMA ETF holdings increased by approximately 267 tons to 20,636 tons.
At the same time, the estimated London free float declined by approximately 8.57 million ounces, or 3.8%, falling to roughly 219 million ounces.
This distinction matters because ETF inflows can reduce the amount of metal readily available for immediate physical settlement or wholesale distribution. In other words, while total vault holdings increased, available floating supply actually tightened.
This tightening is reinforced by ETF allocation data:
The data suggests that metal is increasingly becoming tied up within investment structures rather than remaining freely available.
COMEX inventories appear to be stabilizing around the 315 million ounce level after months of sustained declines.
This stabilization contrasts with the earlier phases of 2026, when inventories were falling rapidly as physical metal exited the exchange system.
While the market has not yet shifted into meaningful rebuilding on COMEX, the slowdown in inventory decline suggests that immediate physical pressure within the U.S. market may be easing relative to earlier months.
The SHFE silver forward curve has now shifted into widening contango.
A contango structure means futures prices are trading above spot prices, generally indicating easing immediate scarcity and the return of carrying costs into the market structure.
The widening contango follows the rapid rebuilding of Shanghai inventories and reflects improving short-term supply conditions relative to the extreme backwardation seen earlier in the year.
At the same time, the Shanghai-London premium remains above 12%, indicating that despite inventory replenishment, regional demand remains strong enough to sustain elevated pricing.
One of the more notable positioning changes this week came from CITIC’s silver positioning on SHFE.
After previously maintaining significant short exposure during earlier phases of the rally, CITIC has now flipped net long on silver traded through SHFE.
This reversal is important because large commercial or institutional participants often reflect broader shifts in market structure and sentiment.
The transition from net short to net long suggests that downside expectations have moderated materially relative to earlier in the year.
The gold-to-silver ratio has declined back to approximately 58.4.
A falling ratio typically reflects silver outperforming gold on a relative basis. Historically, periods of falling ratios often coincide with stronger speculative participation and improving industrial or physical demand conditions for silver.
The compression of the ratio therefore aligns with the broader rebuilding in silver positioning and inventory flows.
For bullion dealers, the key dynamic remains the interaction between Shanghai restocking and tightening London free float conditions. Chinese inventories are rebuilding aggressively, but available Western floating supply is beginning to contract again. The persistence of premiums above 12% indicates that replenishment has not fully normalized regional pricing conditions.
For conservative investors, the current market structure suggests that silver is moving away from outright scarcity panic and toward a more balanced accumulation phase. Rising ETF allocations, stabilizing COMEX inventories, and persistent Chinese premiums indicate that demand remains structurally healthy even after recent volatility.
For traders, the market now appears to be transitioning from squeeze-driven price action toward a more technically structured trend. In the near term, the shift into contango and rapid Shanghai restocking may reduce the probability of immediate vertical upside moves. The current working range likely sits around the mid-$70s to low-$90s per ounce, with the 20,000 CNY/kg region remaining a major psychological resistance level in China.
Over the longer term, however, the broader setup still appears constructive. Even after aggressive rebuilding, Shanghai inventories remain tiny relative to global stocks, London free float is tightening again, and speculative positioning is beginning to recover alongside improving options activity. If Chinese demand continues sustaining premiums above 10% while Western floating inventories continue tightening, silver prices moving back toward and potentially beyond the $100 per ounce region remain plausible over time.
Conversely, a sustained collapse in premiums alongside significant inventory rebuilding in both London and COMEX would indicate that the market is finally moving into true balance rather than controlled redistribution.
Across inventories, vault flows, futures structure, and positioning data, the figures describe a silver market that has exited its most acute squeeze phase while retaining many of the structural conditions that supported the earlier rally.
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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