Silver: Trading
London, New York, Shanghai and India's MCX
London, New York, Shanghai and India's MCX What this tab covers How and where it is bought and sold: who buys and sells, exchanges and benchmarks, contract types, the big trading houses and how prices are discovered.Silver trades alongside gold in London's over-the-counter market under LBMA rules, with a daily benchmark auction. COMEX futures in New York are the main exchange contract, and the Shanghai Futures Exchange and India's MCX carry large domestic volumes. Unlike gold, silver contracts are based on the gross weight of bars at a stated purity rather than fine content (Geman, pdf p. 184). Geman also notes that speculative interest in silver is more sporadic than in gold, which helps explain its larger swings. Lease rates can spike when London vault stocks drain to other centres.
Where it is bought (buyers)
- Indian importers (banks, nominated agencies, bullion dealers) buy 30 kg and 1 kg bars from London, Hong Kong, the UAE and the UK
- Solar paste makers in China and electronics makers in Japan, Korea and Taiwan buy grain and bars on annual supply contracts
- ETFs buy London Good Delivery 1,000-oz bars
- Retail buyers purchase coins and bars from mints and dealers
Where it is sold (sellers)
- Mexican and Peruvian miners sell concentrate to smelters and dore to refiners
- Smelters (Penoles, KGHM, Korea Zinc, Hindustan Zinc, Glencore) sell refined bars
- Recyclers sell refined scrap silver
Exchanges and benchmarks
| Venue | Contract | Notes |
|---|---|---|
| LBMA (London OTC market) | Loco London spot and forwards in 1,000-oz Good Delivery bars, at least 99.9% fine | LBMA Silver Price set daily (ICE Benchmark Administration) |
| COMEX (CME Group) | Silver futures SI, 5,000 troy oz; micro 1,000 oz | Main futures venue |
| Shanghai Futures Exchange and Shanghai Gold Exchange | SHFE silver futures (15 kg); SGE Ag(T+D) | China's onshore price, often at a premium in tight markets |
| MCX (India) | Silver 30 kg; Silver Mini 5 kg; Silver Micro 1 kg | Rupee price including import duty |
| IIBX (GIFT City, India) | Silver bar contracts, dollar-denominated | International bullion exchange for Indian importers |
Contract types
- Concentrate sales with payable silver terms and treatment charges
- Dore refining agreements
- Silver streams (e.g. Wheaton Precious Metals pays upfront for future by-product silver)
- Spot and forward loco London
- Leases and swaps
- Futures and options
Top trading houses
- JPMorgan
- HSBC
- UBS
- ICBC Standard Bank
- Glencore
- Trafigura
- MKS PAMP
- Wheaton Precious Metals (streaming)
How prices are discovered
- LBMA Silver Price (daily)
- COMEX front-month futures
- Shanghai premium over London
- MCX futures and IBJA rates for rupee prices
- Lease rates as a tightness signal