Is a March 2026 Silver Short Squeeze Setting Up?
COMEX registered silver inventories have fallen to approximately 101 to 103 million ounces, marking one of the most aggressive inventory drawdowns in recent years.
At the same time, March 2026 silver futures open interest has recently ranged between 380 million and 429 million ounces. That represents roughly three to four times more paper claims than physical silver currently available for delivery.
With First Notice Day approaching on February 27 and the March contract closing on March 27, pressure is building.
The question investors are asking: Is a physical silver squeeze forming?
COMEX Silver Inventory Collapse: 101 Million Ounces and Falling
Registered silver on COMEX, meaning metal available for delivery, continues to drain despite volatility in silver prices.
Key data points:
- January outflows: Approximately 49 million ounces removed, nearly four times normal pace
- Early February withdrawals: Nearly 19 million ounces already requested
- No meaningful inventory refilling on price dips
- COMEX registered silver now near 101 to 103 million ounces
Meanwhile, the COMEX open interest for March 2026 silver futures has recently reflected hundreds of millions of ounces in paper exposure.
Even as contract rolls reduce March open interest, millions of ounces continue shifting daily. The structural imbalance remains significant heading into the largest delivery month of the quarter.
If delivery demands remain elevated into late February and March, stress on physical inventories could intensify.
March 2026 Silver Futures: Open Interest vs Physical Supply
The silver futures market currently shows:
- 380 to 429 million ounces recently represented in open interest
- Approximately 101 million ounces of registered deliverable silver
This creates a 3 to 4 times paper to physical ratio.
Historically, silver squeezes emerge when delivery pressure collides with tight registered inventory. With First Notice Day on February 27 and full delivery exposure through March 27, timing is becoming a central theme for traders and investors watching silver market structure.
China’s Silver Inventory Collapse: SHFE and SGE at Multi-Decade Lows
The silver squeeze narrative is not limited to COMEX.
On the Shanghai Futures Exchange, silver inventories have fallen to approximately 318 to 342 tonnes, or roughly 10 to 11 million ounces as of February 9 to 11, 2026.
That represents multi-decade lows.
The Shanghai Gold Exchange shows similar tightening. Reports of backwardation signal immediate demand for physical silver.
Contributing factors include:
- China classifying silver as a strategic metal beginning January 2026
- Export restrictions tightening supply
- Industrial demand from solar, electric vehicles, AI infrastructure, and electronics
The East continues pulling physical silver from global markets while Western inventories drain.
Bian Ximing’s 14.5 Million Ounce Silver Short: A Reverse Hunt Brothers Scenario?
A major catalyst drawing attention is billionaire investor Bian Ximing.
After profiting heavily from gold longs, Bian has reportedly built the largest net short silver position on SHFE:
- 450 tonnes
- Approximately 30,000 contracts
- Roughly 14.5 million ounces
At times, that position has exceeded the total silver held in SHFE vaults.
Regulators have reportedly frozen additions to the position, bringing scrutiny to the exposure.
In a tightening physical market, a large short position creates potential risk if forced covering emerges. Some analysts compare this dynamic to a reverse Hunt Brothers situation, where concentrated positioning interacts with constrained supply.
If covering coincides with ongoing physical demand, volatility could increase sharply.
LBMA Tightness and East-West Silver Flows
Beyond COMEX and SHFE, reports of tightening conditions in London add another layer.
Persistent physical flows from West to East continue draining Western inventories.
If structural silver deficits persist into 2026, the mismatch between paper positioning and available physical supply could remain a dominant theme in the silver market.
Silver Price Volatility and the March 2026 Setup
Silver has already shown elevated volatility, with recent price swings between approximately 78 and 84 dollars per ounce.
Key upcoming dates:
- February 27, 2026: First Notice Day for March silver
- March 27, 2026: March contract close
If delivery demands remain elevated or large short positions begin covering, price acceleration into late February or March is possible.
Whether this results in a full silver short squeeze will depend on:
- Delivery participation rates
- Inventory replenishment
- Short positioning behavior
- Continued physical demand in China
Silver Miners and Silver Royalty Stocks: Leverage to a Physical Move
When physical silver tightens, mining equities, royalty companies, and developers often experience amplified price movement relative to the metal.
For investors tracking silver squeeze dynamics, monitoring:
- COMEX registered inventory
- SHFE silver stocks
- Open interest trends
- Delivery notices
- Industrial demand flows
remains critical.
StockShaman.com provides ongoing updates on:
- Silver delivery data
- China silver inventory trends
- Watchlists of silver miners and royalty companies
- Market structure analysis
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