The LBMA & COMEX silver vault stocks were essentially flat in May while the SFE/SGE added massively. Where did China get this massive amount of silver from?

🚁Silver Market Helicopter View🚁 Last week I said that it looked to me like the spring has just about reached it's coiling limit. It's a week later and the spring is still compressed. COMEX silver withdrawals started ramping up right after I posted last week's comments. lol. However, in the last two days, the withdrawals have been swamped by large deposits. It looks to me like the bullion banks are drawing on the shadow inventory to keep the COMEX silver vault stock at equilibrium. SLV continues to hold line with London vault stock just above the 400M ozt mark. The mid-month NYC-London 3M ozt vault stock swap is due on Monday (if they continue the current pattern). As of the last report I saw, silver 1mo lease rates were stubbornly firm around the 0.4% mark irrespective of SLV vault stock flows. Roughly a month ago, India hiked import duties on silver and then imposed import restrictions. Presumably, this tanked India's demand for foreign silver imports (presumably because it likely encourage smuggling again like the last time India danced to this tune). In the last two days, however, India's (local) IBJA spot has flipped to a premium over LBMA spot in spite of some really hefty 15% import duties/taxes (ie. when measured apples to apples [sans duties/taxes], IBJA spot > LBMA spot). Looks like silver demand has recovered in India. The IBJA spot premium to LBMA should encourage silver imports from London (LBMA) and NYC (COMEX) again. In another recent development, China's SGE (spot market) premium to the LBMA has fallen over the last week from over $10 down to ~$6 this morning. At the same time, China's SFE (futures market) premium to the SGE has fallen to a discount and the SFE is draining vault stock massively (SGE might be too, but that data is reported weekly, not daily so we have to wait to see). Maybe SFE silver is draining to shore up the SGE vaults. The SGE > SFE price differential would suggest that demand for immediate delivery physical silver is growing in China again. As China and India both appear to be exhibiting signs of increased demand, there will be increasing stress on the LBMA COMEX to deliver silver.

The IBJA spot to LBMA spot discount was >$1 ever since May 13 or so when India imposed higher import duties and outright import restrictions. This morning the IBJA spot has flipped to a premium over LBMA spot!

Literal Skynet

I ate an apple this morning. I used a knife to cut it in half and then carefully carve the core out. This minimizes waste and maximizes my value. Maximizing value feels good. It reminds me that I don't own enough gold and silver.

India is making smuggling great again just like the last time they hiked import duties and imposed restrictions. They will eventually capitulate and remove the restrictions and lower import duties as they are losing tax revenue to the black market.