What's Behind Huge SILVER Premium in Shanghai? 'This Isn't Supposed to Happen': Chris Marcus
Commodity Culture Sep 2, 2026 35:15
Summary
Persistent Shanghai silver premium above $8 for eight-plus months signals a physical supply squeeze the paper arbitrage cannot close.
India's import-license delays cascaded into a London shortage, pulling metal from China and COMEX and reinforcing the squeeze.
Most silver is mined as a by-product (a secondary credit from mining another metal), so $65 silver still drives strong free cash flow at producers.
Mining-stock valuations look disconnected from spot prices because Wall Street models assume $3,000 gold and $40 silver, not current levels.
A bond-market crisis or US gold revaluation remains a multi-year tail risk that the guest says could push silver dramatically higher.
Key points on First Majestic Silver
- Marcus recalls a 2024 conversation with someone at First Majestic about the then-unusual ~$3 COMEX-Shanghai spread; the First Majestic contact said China smelters were already reaching out directly to Latin American silver producers.
Key points on Kuya Silver Corp
- Marcus says Kuya Silver was approached between Christmas and New Year's by buyers, including solar-panel manufacturers in China and India, who tried to lock in the company's silver output at an $8-10 premium to spot.
Michael Oliver's takeaways
- Top takeaway Marcus cites Oliver's call that silver goes "much higher than $300 within a year," with Oliver adding he would not be surprised to see $1,000 an ounce.
Rick Rule's takeaways
- Top takeaway Marcus says Rule argued that silver miners looked cheaper relative to bullion at $100 silver than they did at $50 silver.
David Hunter's takeaways
- Top takeaway Marcus cites Hunter's view that silver reaches $200 this cycle, is followed by a global bust, and then heads to $1,000 an ounce in the early 2030s.
Chris Marcus's takeaways
- Top takeaway Marcus argues silver is structurally undervalued, pointing to the persistent Shanghai-India premium and the physically driven move from $50 to $121, and says silver could push past $1,000 in a true US bond-market crisis.
- He sees the bigger macro risk in Treasuries ā Treasury Secretary Bessent doubling the pace of bond buybacks while yields keep rising ā which he calls a form of synthetic yield-curve control that erodes faith in the dollar.
- Marcus says it is mathematically impossible for the US to grow its way out of the now ~$40 trillion debt load, and treats a gold revaluation as the only realistic endgame over the next 10-20 years.
- On miners, he argues silver mining stocks are offering an asymmetric setup at current bullion levels and that Rick Rule and Tommy Costa both agree miners look cheap relative to bullion.
- Marcus stresses positioning and time horizon, advising patience and noting that even non-junior silver equities can compound free cash flow at $65+ silver without needing to chase the highest-beta names.
Johnny Kovacevich's takeaways
- Top takeaway Marcus notes Kovacevich's view that silver eventually reaches $200.
Luke Grohmann's takeaways
- Top takeaway Marcus says Grohmann argued a week ago that the recent surge in US Treasury yields is effectively the start of the US bond crisis, a take Marcus endorses.
David Stein's takeaways
- Top takeaway Marcus says Stein was contacted between Christmas and New Year's by three groups, including Chinese and Indian solar-panel manufacturers, looking to lock in his company's silver output at an $8-10 premium to spot.