LAWRIE WILLIAMS:China gold demand already passes 2013 annual record.

 

With the latest week’s gold withdrawals from the Shanghai Gold Exchange (SGE) at 44.9 tonnes, the country’s annual total gold demand so far this year as expressed by this metric has already reached 2210 tonnes – a new yearly record, with a full month and a half yet to go before the year end.  The SGE figures are up to week 43.  The previous full year record was for withdrawals of 2181 tonnes of gold back in 2013.  So far this year, withdrawals from the SGE are 366 tonnes higher than at the same time in 2013.  We thus stand by our forecast that SGE withdrawals this year could hit an enormous 2,600 tonnes plus with weekly demand likely to increase as the 2016 Chinese New Year approaches.

Again, as we have pointed out beforehand there are differences of opinion as to whether SGE gold withdrawals are indeed a true measure of Chinese gold consumption with the mainstream analysts coming up with much lower figures, but much of the difference is down to the limited categories of gold demand they include as retail gold consumption.  Others, like China gold watcher Koos Jansen disagree saying that SGE withdrawals are an accurate measure of the country’s continuing thirst for gold.  Whatever the truth of this matter, SGE deliveries have to be a like for like indicator of overall Chinese demand – and all the analysts saw 2013 as a record year for Chinese gold consumption, so 2015 is certainly setting new records – and comfortably so.  The figures also show that China is likely to account for absorbing around 80% of total global annual new mined gold supply this year.

Indeed Jansen, in his latest posting on www.bullionstar.com points to Chinese gold imports plus its own newly mined gold as coming to just short of 1,900 tonnes in 2015– still below likely total SGE withdrawals for the year.  But there are almost certainly unknown gold imports direct to the mainland which are not recorded in other countries’ export statistics (and China does not report its own gold imports), plus local scrap supplies to make up the difference. Go figure.

14 Nov 2015

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