What evidence exists for silver lease rate spikes and inventory drawdowns in 2024–2025 across London and Shanghai?
Executive summary
Clear, contemporaneous reporting documents repeated episodes of sharply higher silver lease rates and falling visible inventories across London and Shanghai in 2024–2025: London’s short-term borrowing costs spiked into double- and even high‑teens/30%+ periodes by 2025 in multiple accounts [1] [2] [3], while Shanghai and Chinese exchange stocks fell to multi‑year lows and traded at steep premiums [4] [5]. Sources disagree on scale and persistence—some frame the moves as temporary geographic and form mismatches rather than absolute global scarcity [6]—so the evidence best supports episodic physical tightness, pronounced in specific hubs, not a definitive global depletion.
1. Documentary evidence of lease‑rate spikes in London
Multiple market reports and trade press logged dramatic increases in London silver lease rates across 2024–2025: BullionVault and Reuters described one‑month lease rates jumping to historic levels (tripling in a session and “a little over 11%” in mid‑October 2025 respectively) as spot prices broke $50/oz [1] [7], while specialist outlets and analysts reported 1‑month and 3‑month lease readings that rose into the high‑teens, 30%+ and in some accounts near 39% during acute episodes [2] [3] [8]. Kitco and other trade sources also tracked repeated spikes through 2025, noting the phenomenon reoccurred several times that year [9].
2. Shanghai and China: inventories, premiums and backwardation
Chinese exchange and Shanghai market reporting show parallel stress: Shanghai silver traded at large premiums versus futures during late‑2025 and Chinese exchange stocks hit multi‑year lows, creating a localized backwardation and elevated borrowing costs on the domestic market [5] [4]. Overseas reporting and market commentary documented metal flows and dislocations between New York, London and Shanghai—Chinese inventories fell while domestic demand (notably industrial) rose, intensifying local shortages and premiums [10] [5].
3. Inventory drawdowns and delivery pressures—what the numbers show
Several outlets cite falling availabilities on key exchanges and “deliverable inventory” declines: one compilation suggests exchange inventories tracked by LBMA/COMEX fell from roughly 290 million ounces to below 210 million by October 2025 [11], while industry groups and analysts reported successive structural deficits and heavy delivery volumes into CME vaults in 2025 [12] [2]. Commentators link these declines to sustained ETF inflows, industrial demand growth (notably solar PV), and cross‑hub shipments that temporarily removed metal from freely‑lendable pools [2] [11] [3].
4. Drivers: industrial demand, ETFs and cross‑hub flows
Reporting converges on a mix of drivers: sharply higher industrial consumption—solar PV expansion in China and globally—is repeatedly cited as a major structural demand source [2] [3], while large ETF and ETP inflows and shifts of metal geography (New York vs London vs Shanghai) removed readily deliverable bars from lease pools, raising borrowing costs [10] [12] [7]. Some analysts emphasize logistics and “wrong form/location” dynamics—metal exists but isn’t immediately deliverable in the needed form or place—tempering the narrative of absolute physical depletion [6].
5. Contrasts, caveats and competing narratives
Sources diverge on scale and interpretation: industry bodies and bank research warn of sustained deficits and record lease highs [12] [8], while market‑education pieces and bullion dealers stress that lease spikes often reflect temporary tightness caused by location/form mismatches rather than vanished global supply [6]. Extreme claims (very high lease figures beyond trade press norms) appear in some commentary and newsletters and are inconsistent with mainstream reporting ranges, indicating partisan or sensational framing in parts of the coverage (p1_s12 compared with [7]; p1_s3).
6. Bottom line from the evidence
Contemporaneous market data and reporting for 2024–2025 provide robust evidence of episodic, sometimes acute lease‑rate spikes in London and strained inventories/backwardation in Shanghai—driven by accelerated industrial demand, ETF flows and cross‑market dislocations—yet the best‑sourced accounts stop short of proving an absolute global shortage, instead pointing to tight, localized deliverability and liquidity stress that materially affected prices and borrowing costs [1] [2] [6] [5].