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LAWRIE WILLIAMS: China’s SGE gold withdrawals higher in Q1

China’s Shanghai Gold Exchange has just published its gold withdrawal data for March and so far this year the figure is a little higher than last year, when the full year total was a little over 2,030 tonnes, and 5% up on 2016 Q1 withdrawals when the annual total was just over 1,970 tonnes.  Some analysts equate SGE gold withdrawals to total Chinese gold demand, while others may disagree, but the fact remains that the withdrawal figures on an annual basis are far closer to the sum of known Chinese gold imports, plus China’s own gold output, plus a figure for scrap conversion, than other estimates of Chinese gold demand, which tend to be somewhat limited as to what demand categories are included by the analysts in their calculations.

Table: SGE Monthly Gold Withdrawals (Tonnes)

Month

  2018

2017

2016

% change 2017-2018

% change 2016-2018

January

  223.58

184.41

225.08

+21.2%

 -0.7%

February*

  118.42

148.24

107.60

-20.1%

+10.7%

March

 192.61

 192.25

183.24

 +0.2%

 +5.1%

April

 

 165.78

171.40

 

 

May

 

 138.08

147.28

 

 

June

 

 155.51

138.51

 

 

July

 

 144.71

117.58

 

 

August

 

 161.41

144.44

 

 

September

 

 214.24

170.90

 

 

October

 

 151.54

 153.25

 

   

November

 

 189.10

 214.72

  

  

December

 

 185.21

 196.37

 

    

Year to date

  534.61

524.90

515.92

+  1.8%

+3.6%

Full Year

 

 2,030.48

 1,970.37

 

 

Source: Shanghai Gold Exchange.  Lawrieongold.com  

 

It is encouraging in terms of global gold demand patterns that Q1 SGE gold withdrawals are up on those of the past two years and taking the whole of Q1 that irons out the anomalies surrounding the Chinese New Year holiday period given its variable dates year to year.  What will need watching now, given the apparent sharp fall in gold output from the Chinese domestic mines whether this shortfall, estimated by Metals Focus at around 35 tonnes, will be made up in additional SGE withdrawals, or indeed in gold imports, to satisfy what many observers see as strengthening Chinese gold demand this year.

Thus so far this year Chinese gold demand, as represented by SGE withdrawals is holding up well compared with the past two years – indeed is a little higher, but still well down on the record 2015 figure when Q1 withdrawals totalled 625 tonnes and the full year total a massive 2,596 tonnes.

05 Apr 2018

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London – recently described as the World’s No. 2 University (after MIT).

e: lawrie.williams@sharpspixley.com

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