LAWRIE WILLIAMS: Chinese gold demand up a little y-o-y but still well down on 2015
When we talk Asian demand and gold flows from West to East we are largely looking at China and India, so year-on-year statistics are hugely important when trying to assess the state of the global gold supply/demand balance. So far this year Indian gold demand has been substantially above that of a year ago, although perhaps could be a little anomalous because of purchases made ahead of the imposition of that country’s Goods and Services Tax (GST) which came in at 3% on gold as from July 1st.
Chinese demand – as represented by withdrawals from the Shanghai Gold Exchange (SGE) – had appeared to have slipped back marginally in the five months to end May (see: Chinese gold demand falling, not rising), but bigger withdrawals in June – just announced – have redressed the balance, and year to date withdrawals are now a little up on the figure for last year (by 1.2%) but still down around 16.5% on the record figure recorded in the first six months of 2015.
As we’ve noted here before it is somewhat contentious whether SGE withdrawals are a true measure of Chinese gold demand – the major precious metals consultancies disagree. Yet they all seem to come up with different reasons to dispute this. But on our reckoning it’s a pretty good measure as the annual SGE withdrawals figure corresponds quite neatly with the sum of known Chinese gold imports, plus Chinese domestic gold production plus a contingency for scrap and imports from gold producing nations which do not publicise their gold export figures on a country by country basis. In other words, SGE withdrawals come in at close to known and estimated gold flows into China.
Table: SGE Monthly Gold Withdrawals (Tonnes)
|
Month |
2017 |
2016 |
2015 |
% change 2016-2017 |
% change 2015-2017 |
|
January |
184.41 |
225.08 |
255.42 |
- 18.1% |
-27.8% |
|
February* |
148.24 |
107.60 |
156.36 |
+37.8% |
-5.2% |
|
March |
192.25 |
183.24 |
213.35 |
+4.9% |
-9.9% |
|
April |
165.78 |
171.40 |
195.45 |
-3.3% |
-15.2% |
|
May |
138.08 |
147.28 |
162.15 |
-6.2% |
-14.8% |
|
June |
155.51 |
138.51 |
195.67 |
+12.3% |
-20.5% |
|
July |
|
117.58 |
285.50 |
|
|
|
August |
|
144.44 |
265.27 |
|
|
|
September |
|
170.90 |
259.98 |
|
|
|
October |
|
153.25 |
176.29 |
|
|
|
November |
|
214.72 |
202.71 |
|
|
|
December |
|
196.37 |
228.21 |
|
|
|
Year to date |
984.27 |
972.81 |
1178.40 |
+1.2% |
- 16.5% |
|
Full Year |
|
1,970.37 |
2,596.37 |
|
|
Source: Shanghai Gold Exchange, Lawrieongold.com
04 Jul 2017
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).
