The world's largest source of newly refined silver already passes through Texas before continuing thousands of additional miles to exchange-approved depositories concentrated in the New York metropolitan area. Yet despite Texas serving as the primary gateway for a significant portion of North American silver entering the United States, the infrastructure supporting futures market delivery remains heavily concentrated elsewhere.[1]
This concentration reflects historical market structures rather than the modern geography of silver production, transportation, and industrial demand. As a result, substantial quantities of silver travel hundreds or thousands of unnecessary miles before becoming eligible for exchange delivery, increasing costs, operational risks, and logistical complexity for U.S. market participants.
The consequences extend beyond market efficiency. Silver is a critical industrial material used in semiconductors, defense systems, telecommunications equipment, advanced electronics, energy infrastructure, and other technologies important to America's economic competitiveness and national security.
Concentrating all of precious-metals delivery infrastructure for U.S. publicly traded markets within a single geographic region creates avoidable vulnerabilities that stand in contrast to broader efforts to diversify and strengthen critical supply chains.[2]
Establishing at least one futures exchange delivery facility in Texas would better align exchange infrastructure with modern supply chains, reduce transportation costs, strengthen market resilience, and support national security objectives by reducing concentration risk within strategically important commodity infrastructure.
America's Silver Supply Chain Already Depends on Texas
Mexico is the world's largest silver-producing nation, accounting for roughly one-quarter of global mine supply. The country's leading producer and refiner, Industrias Peñoles, is among the largest silver refiners in the world and routinely produces LBMA- and CME-deliverable 1,000-ounce silver bars.
Today, a substantial portion of this silver enters the United States through Texas before being transported to exchange-approved depositories concentrated in the Northeast. In many cases, silver travels thousands of miles beyond its natural point of entry before it can enter the futures delivery system.
This transportation pattern reflects legacy infrastructure decisions that developed when financial activity was heavily concentrated in New York. However, the physical silver market has evolved significantly. Production is concentrated largely in Mexico and the western United States, while industrial activity, refining, manufacturing, logistics, and population growth have increasingly shifted toward the South and West.
A delivery infrastructure designed around historical financial geographies rather than modern commodity flows inevitably creates inefficiencies.
Concentrating Delivery Infrastructure in New York Leads to Significant Economic Costs[3]
Every shipment of silver transported from Texas to depositories in the greater New York area incurs substantial expenses associated with:
- Armored transportation
- Fuel and labor costs
- Security personnel
- Insurance premiums
- Handling and custody transfers
- Regulatory compliance requirements
Because nearly all overland silver shipments from Mexico enter through Texas, a Texas delivery facility would allow much of this metal to enter the futures delivery system significantly closer to where it enters the United States.
The result would be lower transportation costs, fewer custody transfers, reduced insurance expenses, and lower overall operational risk.
Every additional mile traveled increases exposure to theft, accidents, weather disruptions, mechanical failures, and logistical complications. For a market handling hundreds of millions of ounces annually, even modest reductions in transportation costs can generate meaningful savings throughout the U.S. supply chain.
The issue is not merely one of convenience. It is a question of whether market infrastructure is properly aligned with the physical realities of the commodity it serves.
Geographic Concentration Causes National Security Risks
Over the past decade, policymakers have increasingly focused on reducing concentration risk across critical sectors of the U.S. economy.
Federal initiatives involving semiconductors, critical minerals, energy infrastructure, telecommunications networks, and advanced manufacturing have all been driven by a common principle: infrastructure concentrated in a single geographic region creates vulnerabilities that can disrupt markets and impair economic resilience.[4]
The same principle applies to precious-metals infrastructure.
Silver is an essential input for industries that underpin both economic competitiveness and national security. Yet the entirety of exchange-approved delivery capacity remains concentrated within a small geographic area around New York City. Geographic concentration increases exposure to:
- Natural disasters
- Cyberattacks targeting financial infrastructure
- Transportation bottlenecks
- Physical security incidents
- Power grid failures
- Communications outages
- Other continuity-of-operations disruptions
A more geographically diversified delivery network would strengthen continuity of operations, create additional redundancy within the U.S. precious-metals ecosystem, and reduce dependence on a limited number of facilities concentrated in a single region.
Infrastructure that is aligned with physical supply chains is generally more efficient, more resilient, and less vulnerable to disruption.
Precious Metals are Critical for American Industry and Strategic Technologies
Silver is not merely a precious metal used for investment purposes. It is a strategic industrial commodity that plays a critical role in:
- Semiconductor manufacturing
- Advanced electronics
- Telecommunications equipment
- Aerospace technologies
- Defense systems
- Electrical infrastructure
- Renewable energy technologies
- Emerging advanced-manufacturing applications[5]
As demand for these technologies continues to grow, so too does the importance of ensuring that the infrastructure supporting silver markets remains efficient, secure, and resilient.
Just as policymakers have sought to diversify semiconductor fabrication capacity and critical mineral supply chains, diversification of precious-metals delivery infrastructure can help reduce unnecessary concentration risk while supporting long-term economic and strategic objectives.
Diversifying America’s Delivery Network Is Vital for Resiliency
North American silver production is concentrated overwhelmingly in the western half of the continent, including major production from Mexico and western U.S. mining states such as Nevada, Idaho, Alaska, and Arizona.
At the same time, Texas has emerged as one of North America's most important trade, logistics, manufacturing, and industrial hubs.
The state offers:
- Direct access to major U.S.-Mexico trade corridors
- Extensive interstate transportation infrastructure[6]
- International cargo facilities
- Established armored transportation networks
- Proximity to major industrial and manufacturing centers
- Existing infrastructure supporting large-scale commodity movements
As the primary gateway for much of North America's silver supply, Texas is uniquely positioned to support a more geographically balanced and resilient delivery network.[7]
Texas Delivery Points Will Benefit the Lone Star State and America
A Texas delivery point could encourage broader participation from:
- U.S. refiners
- Industrial silver consumers
- Bullion dealers
- Institutional investors
- Commodity market participants seeking lower delivery costs
Lower logistics costs would reduce barriers to delivery and potentially increase deliverable supply. Broader participation generally strengthens futures markets by improving liquidity, enhancing price discovery, and supporting stronger convergence between futures and spot prices.
A geographically diversified delivery network would also provide market participants with greater flexibility while reducing dependence on a single concentration of storage infrastructure.
New Precious Metals Policies That Expand Exchange Storage to Texas are Central to Protecting American Interests
The concentration of exchange-approved silver delivery infrastructure in the New York metropolitan area reflects historical market structures rather than the modern realities of silver production, transportation, and industrial demand.
One or more Texas delivery facilities would allow the U.S. silver market to better align infrastructure with existing supply chains, reducing transportation costs, lowering operational risks, and improving overall market efficiency.
At the same time, geographic diversification would strengthen the resilience of critical commodity infrastructure supporting industries vital to advanced manufacturing, energy systems, defense technologies, and national security.
As policymakers continue to prioritize supply-chain resilience and critical infrastructure protection, establishing an exchange-approved delivery facility in Texas represents a practical, market-driven opportunity to reduce concentration risk while modernizing America's precious-metals delivery network.
The silver already moves through Texas. America's delivery infrastructure should reflect that reality.
Footnotes
- Silver Institute, World Silver Survey 2025. Source: https://silverinstitute.org/wp-content/uploads/2025/04/World_Silver_Survey-2025.pdf
- USGS, Mineral Commodity Summaries 2025: Silver. Source: https://pubs.usgs.gov/periodicals/mcs2025/mcs2025-silver.pdf
- Industrias Peñoles, Metals Operations Overview. Source: https://www.penoles.com.mx/en/our-operations/metals.html
- LBMA, About Good Delivery. Source: https://www.lbma.org.uk/good-delivery/about-good-delivery
- White House, Building Resilient Supply Chains (2021). Source: https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf
- DOE, Critical Materials Assessment. Source: https://www.energy.gov/fecm/critical-materials-assessment
- USGS Silver Statistics and Information. Source: https://www.usgs.gov/centers/national-minerals-information-center/silver-statistics-and-information
Jp Cortez is the Executive Director for the Sound Money Defense League, a non-partisan, national public policy group working to restore sound money at the state and federal level, and lead author of the Sound Money Index.
