Silver inventories at the Commodity Exchange, Inc. (COMEX) have declined sharply in February 2026, with total registered stocks falling below 90 million ounces. Significant withdrawals from Western vaults indicate a potential structural shift in the global silver market, as physical demand increasingly challenges paper-based pricing mechanisms.
Total COMEX silver inventories as of February 20 stood at 366.25 million ounces, down nearly 31% from approximately 532 million ounces in October 2025. Registered silver stocks have slipped below the critical 90 million ounce mark to 88,191,059.264 ounces, while eligible inventories declined to 278,065,980.223 ounces, official data. shown. Inventories have been on a consistent downward trajectory since October last year.
COMEX silver inventory reflects the total physical metal stored in CME Group-approved depositories and available to support futures contracts. A decline in inventory suggests that more physical silver is leaving vaults than entering them, potentially increasing pressure on the exchange as the ratio of outstanding paper contracts to physical metal widens.
Silver inventories are classified into two categories: registered and eligible. Registered silver carries a warrant and is available for delivery against futures contracts. Eligible silver meets COMEX specifications — a minimum fineness of .999 and bar weights between 1,000 and 1,100 troy ounces — but is not currently warranted for delivery.
Transfers between these categories are significant: converting eligible to registered increases deliverable supply, while reclassifying registered to eligible reduces the immediate pool available for settlement.
Impact of Falling Silver Inventories
A decline in registered silver stocks can tighten near-term liquidity, widen bid-ask spreads, and increase price volatility.
Aamir Makda, Commodity & Currency Analyst at Choice Broking, noted that open interest (OI) exceeds available registered stock by over 400%, creating a significant paper-to-physical imbalance and raising the risk of a liquidity event if contract holders demand delivery. He added that tightening inventories have contributed to price divergence, with Shanghai silver trading at a premium of more than $10 over Western spot prices. Lower liquidity has further amplified volatility.
Makda also highlighted that CME Group has responded to heightened volatility by raising margin requirements, which triggered temporary price corrections due to deleveraging.
Harshal Dasani, Business Head at INVasset PMS, said silver is entering a highly sensitive phase marked by a widening divergence between physical fundamentals and paper positioning. Combined inventories across China’s SGE and SHFE exchanges are estimated at around 700,000 kilograms, while COMEX registered stocks stand near 88 million ounces against March open interest of roughly 230 million ounces — underscoring the substantial gap between paper exposure and deliverable supply.
He attributed the recent price correction primarily to technical factors, including margin hikes and forced unwinding of leveraged positions, rather than weakening demand.
“Silver remains in structural deficit due to industrial usage and limited mine expansion. Notably, major US banks continue to hold sizable short positions, which has long fueled arguments that paper markets suppress prices temporarily,” said Dasani.
With Chinese markets reopening, renewed physical buying could emerge quickly. While March is expected to remain volatile, Dasani suggested that price dips may represent opportunity phases rather than trend reversals.
Vandana Bharti, Head of Commodity Research at SMC Global Securities, cautioned that although lower registered stocks reduce the delivery cushion and may tighten liquidity during major delivery months such as March, COMEX inventories represent only a portion of global supply. Eligible metal can be reclassified as registered, and additional supply may flow from imports or over-the-counter markets.
“The real risk for March depends on how much open interest stands for delivery compared to available registered stocks — if delivery demand rises sharply, prices and premiums may increase, but it does not automatically mean a global supply deficit,” she said.
Silver Price Outlook
Makda expects MCX silver price to trade in the range of ₹2,50,000 to ₹2,80,000 per kilogram in the near term.
“There could be a considerable risk of a delivery squeeze, driven by significant delivery notices issued by major institutions like JP Morgan, indicating a shift toward securing physical bullion in the upcoming month. March is critical for deliveries, and if industrial users, operating on limited inventory, opt to stand for delivery on the COMEX, it could lead to widespread demand,” said Makda.
Ajay Kedia, Director of Kedia Advisory said that elevated open interest and rising delivery demand may further intensify volatility. “A break above $90 could trigger fresh upside for silver prices, while structural deficits support a higher long-term price floor,” he said.
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