China’s Gold Imports From Hong Kong Slump on Quota Backlog
By Bloomberg News
Jun 5, 2013 8:48 PM ET
China’s gold imports from Hong Kong slumped in April from a record as banks failed to get quotas fast enough to meet surging demand from mainland buyers keen to purchase bullion as prices fell into a bear market.
Mainland buyers purchased 126,135 kilograms, including scrap, compared with 223,519 kilograms in March, according to Hong Kong government data yesterday. Net imports, after deducting flows from China into Hong Kong, were 75,891 kilograms, from 130,038 kilograms a month earlier, according to Bloomberg calculations.
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“Some qualified banks used up their gold import quota in the first three months and weren’t able to get the paperwork done fast enough to bring in bullion in April,” said Tian Rui, vice president of the precious metals division at INTL FCStone Trading Co. “We might see higher imports in May because demand surged after the rout.”
Bullion of 99.99 percent purity on the Shanghai Gold Exchange dropped 7.4 percent in April, and was at 278.55 yuan a gram ($1,414 an ounce) at 9:22 a.m. local time.
Spot Gold
Spot gold for immediate delivery traded at $1,399.20 an ounce at 9:22 a.m. Shanghai time today and has declined 17 percent this year.
China’s purchases in April were 22 percent higher than the 103,644.5 kilograms in the same month last year, according to the data from the Hong Kong Census and Statistics Department. Mainland China doesn’t publish such data.
Exports of gold to Hong Kong from China were 50,244 kilograms in April, according to a separate Statistics Department statement, down from 93,481 kilograms in March, and compared with 37,316 kilograms in April 2012.
Volumes for the spot contract on the Shanghai Gold Exchange, China’s biggest cash bullion market, topped 323 tons between April 16 and May 3, according to data compiled by Bloomberg. The trading volume exceeded 20 tons every day from April 16 to May 3, when prices fell to the lowest since August 2010. That’s more than four times the daily average in 2012. Volumes reached a record 43,272 kilograms on April 22.
China Premium
The premium gold buyers in China pay to take immediate delivery of bullion jumped four-fold as consumers swarmed jewelry shops after prices plunged by the most in three decades.
Still, gold demand in China, the world’s largest consumer after India, may slow after surging in April, said Zhang Bingnan, secretary-general of the China Gold Association.
China’s domestic consumption totaled 776.1 tons in 2012, down from 779.8 tons the previous year, according to the producer-funded World Gold Council. China and India account for more than half of global demand.
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