COMEX Silver Contracts Settle 75% in Physical Delivery in Five Days

During the first five trading sessions of September, more than 75% of COMEX silver contract open interest settled via physical metal transfers, according to The Vault Report.

Physical metal transfers replaced standard settlement procedures as institutional participants systematically declined cash settlement options. Market entities instead initiated transfers of vaulted silver directly into custodial custody during the opening week of the delivery cycle.

Over 75% of the September delivery commitment shifted into direct physical transfers within five trading sessions.

The volume of physical withdrawals comes as visible stockpiles across international trading hubs face structural constraints. Total visible silver inventories across the LBMA, COMEX, Shanghai Futures Exchange (SHFE), and Shanghai Gold Exchange (SGE) stand at 1.32 billion ounces, according to The Vault Report.

Circulating inventory remains significantly narrower than headline figures indicate. More than 80% of the aggregate 1.32 billion ounces tracked across global venues remains locked inside ETF collateral baskets, restricting its availability for spot settlement without fund liquidation.

On the COMEX, freely deliverable Registered inventory has drawn down to multi-year lows. This category represents the specific volume of vaulted metal holding active warrants required to meet immediate exchange delivery obligations.

Market Context

The systematic shift toward direct physical metal custody alters operational conditions for wholesale market participants and clearing members.

When institutional buyers demand physical fulfillment rather than cash settlements or contract rollovers, clearing operations must draw directly from unencumbered inventories. Because over four-fifths of global visible silver across LBMA, COMEX, SHFE, and SGE networks is tied to ETF collateral, physical fulfillment depends on a restricted fraction of total reported stocks.

The continued reduction of freely deliverable Registered inventories on the COMEX contracts the liquidity buffer required to absorb concentrated delivery notices.

As physical bars move out of exchange float and into direct custodial custody, vaulted depositories face reduced deliverable reserves for upcoming contract settlement periods.