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).
e: lawrie.williams@sharpspixley.com
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