I just saw the silver inventory data from the Shanghai Futures Exchange, and honestly, it’s a bit shocking. The inventory is down to just 318.5 tons—this is the lowest in more than 10 years, and it hasn’t been this tight even compared with the record from October 2015.

Even more alarming is the rate at which the silver is being consumed. From the beginning of this year to now, silver inventories have evaporated by 54%—meaning that in just a few months, more than half of the reserves have been lost. Compared with the same period last year, the decline has been even more straight down, making the overall tightness of silver inventories obvious at a glance.

So what does this reflect? As the world’s largest consumer of precious metals, China’s demand for physical silver is through the roof, and it really doesn’t care about the price. Once an exchange’s silver inventory falls to dangerous levels, it’s easy to trigger a short-squeeze situation, because there isn’t enough spot metal available for delivery. No wonder silver prices have been rising so aggressively lately.

What’s interesting is whether this wave of silver scramble will spread to COMEX and the London market. If silver inventories in China continue to run critically low, the next market that could end up under pressure might be theirs. For now, it looks like the global silver inventory squeeze is only just beginning.