How Shanghai, London and COMEX Influence Global Silver Supply

Silver is a global market, not a local shelf. That means bullion availability is influenced not just by mine supply and refinery throughput, but also by the major trading, storage and delivery hubs where wholesale silver is priced, held and moved. London matters because of the LBMA market and Good Delivery bar system. COMEX matters because its silver futures are physically deliverable into an exchange-regulated warehouse network. Shanghai matters because it is a major physical demand and pricing centre with its own benchmark structure. Together, these hubs help shape where silver flows and how tight physical supply feels in different regions.

Why London matters

London is central because the loco London bullion market relies on standardised Good Delivery bars. LBMA says Good Delivery silver bars are approximately 1,000 troy ounces and must meet minimum purity and specification requirements. That system makes wholesale silver more fungible and tradable across large market participants. If liquidity in London tightens, the effect can ripple across the wider global silver market because London remains one of the most important over-the-counter bullion hubs.

Why COMEX matters

COMEX is often dismissed as “just paper,” but that is too simplistic. CME’s contract specifications state that the standard silver futures contract covers 5,000 troy ounces, and silver delivered under the contract must assay to at least 999 fineness and be an approved brand. That means COMEX is connected to a real warehouse-and-delivery framework for wholesale silver. In stressed markets, inventories and delivery incentives tied to COMEX can affect where physical silver ends up.¹

Why Shanghai matters

Shanghai matters because it is not just another regional retail market. The Shanghai Gold Exchange publishes a daily Shanghai Silver Benchmark Price under the SHAG contract framework, and the Exchange’s rules show SHAG is quoted in yuan per kilogram with delivery based on recognised silver ingots at minimum 999.9 fineness. That makes Shanghai a serious physical pricing centre. If pricing in Shanghai strengthens materially against other hubs, it can pull silver toward China.²

What happens when one market pays more than another

This is where arbitrage comes in. If silver is worth materially more in one hub than another after costs, market participants have an incentive to redirect metal toward the stronger bid. Bloomberg reported in late December 2025 that spot silver premiums in Shanghai had risen above $8 an ounce over London prices, the largest spread on record. That is not just an abstract market statistic. It is the type of price dislocation that changes physical flows.³

Real-world silver flows prove the point

Reuters reported in October 2025 that large inflows of silver from the U.S. and China helped ease a liquidity crunch in London’s spot market. The same report said around 83% of silver held in London vaults was allocated as of end-September 2025, which meant much of the headline inventory was not freely available. Reuters also said Shanghai Futures Exchange stocks had dropped sharply, which supports the idea that physical silver was under pressure across multiple hubs at once.

Reuters also reported earlier in October 2025 that silver previously pulled into COMEX warehouses could be expected to head back to London because London spot prices had moved to a premium over COMEX futures. Again, that is the same basic story: silver moves when the pricing signal is strong enough.⁴

Why this affects retail bullion buyers

Most retail buyers never touch a 1,000-ounce Good Delivery bar or a COMEX delivery mechanism. But they still feel the effect. If silver is being pulled between London, New York and Shanghai, it can tighten availability for refiners, fabricators and mints further down the chain. That can mean higher premiums, longer lead times, patchy stock and slower replenishment even when silver is still trading actively on screen. The Silver Institute’s February 2026 outlook adds more context here by saying the market is expected to remain in deficit for a sixth straight year and continue relying on above-ground inventories.⁵

Why this does not mean mints are literally raiding exchanges

This point needs to stay clean. The defensible claim is not that mints themselves are directly emptying COMEX or Shanghai vaults for coin production. The stronger claim is that when fresh refining or fabrication throughput is tight, already-refined wholesale metal held inside recognised market channels becomes more strategically important, and regional price differences can help redirect those flows. That is consistent with LBMA standards, CME delivery rules and Reuters’ reporting on actual movement between hubs.

Final thoughts

Shanghai, London and COMEX matter because silver is a global physical market with regional pricing signals, standardised wholesale bars and real delivery mechanisms. When one hub tightens or pays more, silver does not sit still. It moves. And when it moves, the effects eventually reach the retail market in the form of premiums, delays and stock pressure.

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