China Gold Imports Drop on Weaker Demand, Qingdao Metals Probe

July 24, 2014 Posted by admin

China’s gold imports from Hong Kong
fell for a fourth month in June amid weaker demand from
retailers and a deepening probe into commodities being used in
financing deals.

Net imports totaled 36.4 metric tons, compared with 52.3
tons in May and 100.9 tons a year ago, according to calculations
by Bloomberg News based on data from the Hong Kong Census and
Statistics Department today. Exports to Hong Kong from China
rose to 19.7 tons in June from 14.9 tons in May, the statistics
department said in a separate statement. Mainland China doesn’t
publish such data.

Lower demand from China, which surpassed India as the
biggest gold consumer last year, may weigh on prices that have
increased 8 percent this year. Retail sales at Chow Tai Fook (1929)
Jewellery Group Ltd., the world’s largest listed jeweler, fell
24 percent in mainland China during the three months through
June 30, it said. Demand also declined as commodity financing
deals unwound following a loan fraud investigation in eastern
China’s Qingdao, said Liu Xu, an analyst at Capital Futures Co.

“The drop in imports for a fourth month indicated a weaker
appetite from both retail-level consumers and companies that use
gold as a tool for financing,” said Liu.

Banks are examining lending linked to metals at Qingdao
port amid concern that risks are more widespread in China, where
traders use commodities from gold to copper to get funding.
Standard Chartered Plc sued Chen Jihong, the owner of a metals
trading company for $35.6 million the bank says it’s owed under
a loan agreement.

China’s gold demand fell 19 percent in the first six months
of this year as investors bought fewer bars and coins,
offsetting increased demand for jewelry, the China Gold
Association said yesterday.

Bullion for immediate delivery in London fell 0.5 percent
to $1,297.13 an ounce at 4:51 p.m. Beijing time, according to
Bloomberg generic pricing. Bullion of 99.99 percent purity on
the Shanghai Gold Exchange gained 3.5 percent in June.

Mainland Chinese buyers purchased a total 56.1 tons in June
including scrap, compared with 67.2 tons in May and 112.6 tons a
year earlier, data from the Hong Kong government showed.

To contact Bloomberg News staff for this story:
Feiwen Rong in Beijing at

To contact the editors responsible for this story:
Ramsey Al-Rikabi at
Jarrett Banks, Sungwoo Park

Article source:

Leave a Reply

Your email address will not be published. Required fields are marked *