Submitted by The Silver Wig:
Silver COMEX Decoupling: Physical Players Are Quietly Walking Away from the Paper Market
A deep dive into the data behind one of the most important - yet overlooked - shifts in the global silver market right now.
For months, silver market watchers have been sounding the alarm: something feels off between the physical metal and the COMEX futures price. Registered inventories remain stubbornly low, physical premiums in Asia are elevated, and stories of miners and refiners bypassing the exchange entirely have become routine.
But numbers don’t lie - and when you look at the right ones, the picture becomes crystal clear.
1. The Surface Signals: Low Open Interest, Surging China Demand, and Direct Deals
Silver open interest on COMEX has collapsed to historically subdued levels - recently to just over 100,000 contracts. At the same time, the physical market is flashing every warning light imaginable.
China alone imported a staggering 836 tonnes of silver in March 2026 - one of the strongest monthly prints on record. Major miners and refiners are openly routing production straight to Chinese buyers and large industrial end-users (solar, EV, electronics) at 25%+ premiums over the COMEX benchmark.
Meanwhile, COMEX registered silver inventories sit at just ~76-77 million ounces, providing only ~13% coverage against open interest. Vault inflows have essentially dried up.
These are symptoms of the same underlying reality: the physical silver market is increasingly operating around the COMEX futures exchange rather than through it. Physical players - the very ones who traditionally supply and hedge on the exchange - appear to be stepping back in a meaningful way.
That combination of signals sent me down a rabbit hole. If the physical market really is decoupling, the clearest evidence should show up where the physical hedgers themselves are tracked: in the most granular level of the CFTC Commitment of Traders (COT) report.
2. Zooming In on PMPU Silver Shorts - The Exact Category That Matters
Enter the Producer/Merchant/Processor/User (PMPU) category in the disaggregated COT report.
PMPU shorts represent the actual physical players: miners, merchants, refiners, processors, and industrial users who use futures contracts to hedge the real metal they produce or consume. When a miner sells future production or a refiner hedges incoming doré, those positions show up here. This is not speculative money or swap dealers - it is the commercial backbone that traditionally ties physical supply to the paper price.
In the April 21, 2026 disaggregated COT report, PMPU shorts stood at just 19,208 contracts - essentially unchanged (+5) from the week before. On the surface, that number might not scream “crisis.”
But when you compare it to history, it stands out like a red flag. That single data point was the hook that made me dig deeper.
3. The Data Dive: Downloading the Raw CFTC Files and Running the Numbers
Instead of relying on second-hand charts or legacy “commercial” aggregates, I went straight to the source.
The CFTC publishes full disaggregated weekly Excel files for every year. I downloaded the official fut_disagg_xls files for 2023, 2024, and 2025, filtered for silver (contract code 084691), and pulled the exact column Prod_Merc_Positions_Short_All - the official PMPU short position.
Then I calculated the simple arithmetic average across every weekly report in each calendar year.
The three-year average sits at approximately 36,700 contracts.
Here are the verified full-year averages:
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2023: 33,551 contracts
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2024: 41,695 contracts
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2025: 34,770 contracts
The three-year average sits at approximately 36,700 contracts. Feel free to check my math using the
Current levels (~19,200) are now roughly half the 2024 peak and materially below every prior year’s average and seems to be stabilizing here. The average YTD for 2026 is just 22,500.
To make sure this wasn’t just a seasonal quirk, I isolated the January-through-March window each year (the exact period where the 2026 collapse occurred):
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2024: Rock-steady in the 42,000-43,000 range every single week.
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2023: Fluctuated between roughly 25,000-41,000 - no collapse.
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2025: Some gradual softening began, but levels remained well above anything seen in 2026.
The 2026 pattern is unmistakable: PMPU shorts opened the year at ~30,754 contracts (January 7 report), then fell sharply to the 18,600-19,200 range by mid-March - and have remained essentially flat ever since, including the latest April 21 print at 19,208.
This is not seasonality. It is a structural break.
4. The Conclusion: The Collapse Is Real, and the Data Confirms It
The numbers speak for themselves.
Physical hedgers have dramatically and sustainably reduced their participation on COMEX futures. Ounces that used to flow through the exchange - and get hedged there - are now being sold directly via OTC contracts, private deals, and direct shipments to Asia and industrial buyers. Those diverted ounces never generate a new PMPU short position in the COT data in the first place.
A single-week snapshot (19,208 shorts) might look unremarkable in isolation. But when placed against three full years of raw data, the multi-month collapse, and the complete absence of any comparable January - March drop in prior years, the conclusion is unavoidable: this is a genuine, sustained step-back by the very participants who have historically anchored the physical market to COMEX.
This hypothesis is supported by other key data points:
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Critically Low & Declining COMEX Registered Silver Inventories
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Record China Silver Imports
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Persistent Shanghai/SHFE Premium Over COMEX
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Historically Low COMEX Open Interest
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Sixth Consecutive Annual Global Silver Market Deficit
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Record Physical Deliveries/Withdrawals from COMEX
Collectively, they show real physical metal is moving out of the COMEX system.
The “paper vs. physical” decoupling narrative is no longer hypothesis - it is now visible in the official regulatory data. It’s a view into the future where MUCH higher silver prices reign.
5. What This Means: Bearish for COMEX, Bullish for Silver
For the COMEX futures market, this is unambiguously bearish.
The exchange is quietly losing its central role in global silver price discovery. They have been lowering margins in a panic to lure in business. This is another signal.
If the physical supply chain increasingly operates outside the futures market, COMEX becomes less representative of true supply/demand fundamentals. Liquidity thins, price signals weaken, and the benchmark that the entire industry has relied on for decades slowly erodes.
For the silver price itself, however, the same dynamics are powerfully bullish.
Real physical tightness - record Asian demand, direct deals at large premiums, critically low visible inventories - is simply not being fully expressed in the futures price. The longer this decoupling persists, the greater the pent-up pressure becomes. When the physical market eventually forces a re-connection (through higher spot prices, exploding premiums, or a delivery squeeze), the move higher could be swift and violent.
In short: the paper market is no longer telling the full story.
The physical market already moved on - and the price will eventually have to catch up.
The physical market already moved on - and the price will eventually have to catch up.
The silver market is sending a clear message. The question is: Who’s listening?
This analysis is based solely on publicly available CFTC disaggregated Commitment of Traders data and observable market indicators. It is not financial advice. Markets are complex and influenced by many factors. Always conduct your own due diligence and consult qualified professionals before making any investment decisions. Past performance is not indicative of future results. DYOR.
