Shanghai Silver Inventories Plunge to Near-Decade Low, Intensifying Global Supply Concerns
Inventories of silver held on the Shanghai Futures Exchange (SHFE) have collapsed to their lowest point in nearly a decade, highlighting severe tightness in the global physical silver market and raising significant alarms about the stability of international supply chains. The dramatic drawdown underscores a critical shortage that could have far-reaching implications for industries and investors worldwide.
Steep Decline in Exchange-Held Stocks
Latest data reveals that silver available for delivery on the SHFE has dwindled to approximately 350 tonnes, marking the lowest inventory level recorded since 2015. According to detailed figures from CEIC, silver inventories specifically stood at 318.546 tonnes as of February 9, 2026, a notable decrease from the 349.900 tonnes reported just three days earlier on February 6, 2026.
This represents a staggering decline of more than 88% from the all-time peak of 3,091.112 tonnes documented on January 12, 2021, vividly illustrating the extent of the depletion in China's exchange-held silver reserves over the past several years. The rapid inventory reduction points to a supply-demand imbalance that is becoming increasingly acute.
Key Drivers Behind the Inventory Crunch
Market experts attribute the sharp inventory depletion partly to substantial silver exports from China to London throughout 2025. While these shipments provided some relief to the global physical squeeze in international markets, they significantly drained local stockpiles, exacerbating tightness within China's own domestic silver ecosystem.
"China remains one of the world's largest consumers of silver across multiple critical sectors, including manufacturing, renewable energy, and bullion investment," emphasized Jigar Trivedi, Senior Research Analyst at IndusInd Securities. "China's silver market has delivered a powerful message to global traders and investors this week. The latest inventory decline underscores broader challenges within the physical silver supply chain that cannot be ignored."
Trivedi further noted that global mine production growth continues to remain modest at best, while industrial demand—propelled by booming sectors such as electronics, solar energy, and electric vehicles—keeps climbing steadily. Simultaneously, recycling flows have failed to scale up meaningfully due to persistent price volatility and logistical constraints, severely limiting the ability of secondary supply to compensate for the growing shortfall.
Bullish Price Outlook Amid Supply Constraints
The persistent inventory drawdown has reinforced bullish sentiment around silver prices, particularly for the medium term, as physical availability tightens across key global markets. On the international front, Comex silver prices are currently trading near the $78–$83 zone following a sharp correction from record highs above $121.
According to Trivedi, the outlook for silver prices remains fundamentally constructive despite potential near-term resistance. He anticipates that Comex silver prices will encounter resistance around the $90 per ounce level in the short term. On the domestic Indian market, MCX silver price for March futures contracts is projected to rise to ₹3,20,000 per kilogram over the next month, bolstered by robust physical demand and ongoing supply-side constraints.
Analyst Perspectives on Market Trajectory
Ponmudi R, CEO of Enrich Money, believes that while the broader bullish structure remains intact on higher timeframes, the steep recent pullback has pushed prices below key moving averages, indicating short-term bearish pressure and an extended corrective phase.
"Strong buying interest is clearly visible in the $65–$70 support band, aligned with prior swing lows and long-term trend support," explained Ponmudi R. "A sustained hold above this critical base, followed by a recovery and close above $85–$92, could effectively revive upside momentum toward $95–$105 and potentially retest previous highs."
According to his analysis, the medium- to long-term outlook for silver prices remains decidedly constructive, supported by steady industrial demand and structural supply constraints, despite elevated volatility that may persist in the near term.
Monitoring Inventory Movements and Market Implications
Market watchers and investors will continue to closely track inventory movements on major global exchanges, as sustained low stock levels could amplify price volatility and strengthen silver's dual appeal as both an essential industrial metal and a strategic investment asset. The current situation serves as a stark reminder of the fragile balance within commodity markets and the interconnected nature of global supply chains.
