The silver bullion market has a key new player – Enter the Dragon. The
Shanghai Futures Exchange in China is replacing JP Morgan bank and its
clients as the most significant new source of demand according to a
very interesting blog with some great charts and tables published by SRSrocco
Report yesterday.
According to the report:
The days of JP Morgan controlling the silver market may be numbered as
a new player in the silver market has arrived. For the past several
years, JP Morgan held the most silver on a public exchange in the
world. While the LBMA may hold (or did hold) more silver, their
stockpiles are not made public.
Regardless, JP Morgan held the most silver at nearly 74 million oz
(Moz) in its warehouse, up until recently. Over the past two month, JP
Morgan’s silver inventories have fallen nearly 7 Moz to 67.1 Moz today:
As I mentioned in my previous article, Why Are The Chinese Stockpiling
Silver? Big Move Coming?, JP Morgan increased their silver inventories from 4
Moz in April 2011 to 69.4 Moz April 19, 2016. However, the Shanghai
Futures Exchange silver inventories surged from 7.5 Moz in August 2015 to
54.7 Moz on April 19, 2016:
Basically, JP Morgan added an average 16.3 Moz of silver each
year for the past years, whereas the Shanghai Futures Exchange added nearly 7
Moz per month. Furthermore, the majority of gains came
since the beginning of 2016. Again, here is my previous Shanghai
Futures Exchange silver stock chart from the article linked above:
As we can see from this chart dated April 19th, the Shanghai Futures
Exchange more than tripled their silver inventories since November
2015. What is even more interesting is the continued buildup over the
past two weeks. Here is an updated chart based on data for May 3rd:
Over the past two weeks, the Shanghai Futures Exchange added another
179 metric tons (mt) or 5.8 Moz. Now, if we update the JP Morgan and
Shanghai Futures Exchange silver stock chart (from above) we have the
following:
Here we can see that JP Morgan’s total silver inventories have
declined from 69.4 Moz to 67.2 Moz, while the Shanghai Futures Exchange
silver stocks have increased from 54.7 Moz to 60.6 Moz.
If the Shanghai Futures Exchange continues to add silver at this rate, it
will surpass JP Morgan in a two to three weeks.
Comex Registered Silver Inventories Drop Nearly 4 Million Ounces
Yesterday
When the CME Group published the recent silver inventory change on the
Comex yesterday, nearly 4 Moz were transferred from the Registered to
Eligible Category. The majority of the transfer came from the CNT
Depository at nearly 3.5 Moz with 485,325 oz from HSBC:
Some analysts say these transfers really don’t mean much if the
overall inventories stay the same. That may be true, but there was some
reason the CNT Depository transferred 3.5 Moz of silver from their Registered
Inventories to the Eligible.
That being said, the Chinese are adding a lot of silver to their
Shanghai Futures Exchange warehouses. The build from 7.5 Moz in August
2015 to over 60 Moz of silver in the beginning of May puts JP Morgan’s
four-year inventory growth to shame.
For whatever reason, silver inventories at the Shanghai Futures
Exchange warehouses are increasing at a rapid pace while the Comex silver
stocks continue to decline. Comex silver inventories
were over 180 Moz in July 2015 and are now only 151 Moz. This is quite
interesting as the Shanghai Futures Exchange inventories started to build from
7.5 Moz in August 2015 to the 60.6 Moz today.
It will be interesting to see how the exchange inventories and price
action of silver play out over the next several months.
Enter the Dragon ! See SRSrocco report here
Week’s Market Updates
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Gold Prices (LBMA)
04 May: USD 1,280.30, EUR 1,114.18 and GBP 883.59 per ounce
03 May: USD 1,296.50, EUR 1,118.15 and GBP 881.32 per ounce
29 April: USD 1,274.50, EUR 1,119.45 and GBP 873.80 per ounce
28 April: USD 1,256.60, EUR 1,106.45 and GBP 861.43 per ounce
27 April: USD 1,244.75, EUR 1,100.79 and GBP 853.58 per ounce
Silver Prices (LBMA)
04 May: USD 17.18, EUR 14.96 and GBP 11.86 per ounce
03 May: USD 17.49, EUR 15.10 and GBP 11.92 per ounce
29 April: USD 17.85, EUR 15.67 and GBP 12.22 per ounce
28 April: USD 17.35, EUR 15.29 and GBP 11.92 per ounce
27 April: USD 17.34, EUR 15.34 and GBP 11.87 per ounce
