China Not Only Imports Gold Through Hong Kong

China goldThere are some gold analysts that create presumptions about Chinese gold demand by looking at how much gold Hong Kong net exports to the mainland, as if the mainland only imports gold from Hong Kong.  This a misconception; just because China doesn’t officially disclose their gold trade numbers doesn’t mean they only import gold through Hong Kong.
Some news outlets have been reporting on falling net imports by China in November, from 130 tons in October to 61 tons in November, thereby suggesting demand is fading. This suggestion ignores the fact that the mainland doesn’t exclusively import gold from Hong Kong. It’s true that most of China’s gold imports emanate from Hong Kong, but this is not an accurate reflection of Chinese demand.
The mainland has 22,117 kilometers (13,743 miles) of border, does anyone really believe that gold does not enter China through ports located anywhere at the border other than Hong Kong?

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Submitted by Koos Jansen, In Gold We Trust:

To give you a small example, this is an article from the China Gold Association which reports on gold ore imports from Kazachstan in 2012.

 

Translated by Soh Tiong Hum:

 

Gold Ore Imports Surge Through Port Of Alashankou, Xinjiang

 

Published: 2012-11-28 

 

Between January and September 2012, 16,800 tons of gold ore worth USD 6.5 million entered Alashankou, Xinjiang port of entry, an increase of 1173 % over the same period in 2011.   The sharp increase in volume is mainly due to rise in gold price and an increase in profit margin for imported inferior gold ore. China maintains its strong emphasis on the import of resource commodities and provides enterprises with encouraging policies. In the meanwhile port of entry inspection units and transport departments take convenient and speedy measures to ensure that goods clear customs quickly, in turn lowering cost of logistics. In the same year, the port commission attracted investments in a gold ore processing plant and a gold smelter so as to value-add to imported gold ore thereby increasing demand for the raw material.

 

Map of China

 

Alashankou (A on the map) in the Xinjiang province is the main port from Kazachstan to China. 16,800 tons of gold ore is approximately 4000 ounces of fine gold, not much. However, it’s an example of the Chinese buying all the gold they can get their hands on. If you read the website of the port Alashankou it states the import of metal ores is still increasing. Gold is not only coming in through Hong Kong, it can be imported from anywhere. CME started to recognize this in September 2013:

The vast majority of bullion inflows into China emanate from Hong Kong which still serves as the main conduit into the mainland and often serves as a proxy for Chinese demand (although direct imports through Shanghai are increasing).

 

According to my findings  the best way the calculate China’s total net gold import is by taking SGE withdrawals as a reference, read this for a full analysis.

 

In 2013 the exact amount of gold withdrawn from the SGE vaults was 2197 tons. This can only have been supplied by domestic mine production (430 tons), scrap (200 tons, my guess) and import. So..

 

Import = 2197 – 430 – 200 = 1567

 

China roughly (because I cant be sure on the scrap number) has imported 1567 ton of gold in 2013.

 

Some news outlets have been reporting on falling net imports by China in November, from 130 tons in October to 61 tons in November, thereby suggesting demand is fading.

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Hong Kong - China gold trade monthly 11-2013

 

This suggestion ignores the fact that the mainland doesn’t exclusively import gold from Hong Kong. It’s true that most of China’s gold imports emanate from Hong Kong, but this is not an accurate reflection of Chinese demand. Let’s have a look at the next chart.

 

SGE vs mining + HK imports + scrap 2013

 

We can see big differences between the red line (SGE withdrawals = Chinese demand) and the height of the blue bars (all known supply). The gaps had to be filled by additional import (illustrated in November on the chart). Note, Honk Kong trade numbers from December haven’t been released yet.

 

By looking at  SGE withdrawals we can see that demand hasn’t been dropping since October, au contraire,  it has increased! From 139 tons in October, to 168 tons in November, reaching 218 tons in December. Chinese demand for physical gold was clearly visible on retail level around new year when there was a national shopping spree which I reported on here. The upward trend continues in January; 99 tons of gold were withdrawn from the SGE vaults in the first 10 days of 2014. One of my sources in the mainland notified me on scarcity in storage capacity for consumers, January 7:

HSBC, Bank of China, Dah Sing Bank, Bank of East Asia, Shanghai Commercial Bank, ANZ, Citibank and Hang Seng Bank; NONE have available Safe Deposit Boxes – all occupied and there is a waiting list.

 

 

Having said that, lets quickly go through to the other numbers from the Hong Kong Census and Statistics Department on gold trade up until November, as this is still valuable information.

 

 

For clarity, the following charts are all based on trade numbers from Hong Kong. With these numbers we know how much gold ends up in Hong Kong itself (import minus export) and how much gold Hong Kong trades with other countries (net import or export). The “China net inflow charts” are only about the amount of gold that China mainland net imports through Hong Kong.

 

Hong Kong net exported 1017 tons of gold to the mainland in 11 months.

 

Hong Kong - China gold trade 11-2013

 

Hong Kong itself net imported 573 tons of gold in 11 months. I hope I can write more on this in the future because there is mainland demand hidden in these numbers.

 

Hong Kong gold trade 11-2013

 

Hong Kong net imported 66 tons from Switzerland in November, down from 85 tons in October, – 22 % m/m. A second monthly decrease, this could signal that the main vein (the gold route from the UK to Shanghai) is drying up. Year to date (nov-2013) Switzerland has net exported 848 tons of gold to Hong Kong.

 

HK Swiss gold trade 11-2013

 

From January – November Hong Kong and the mainland net imported 1590 tons.

 

Hong Kong + China net gold inflow 11-2013

 

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For the Hong Kong gold trade charts I use the following categories from the customs report.

 

HKHS code (Hong Kong Harmonized System)

 

98002: GOLD COIN AND CURRENT COIN

97101: GOLD (INCLUDING GOLD PLATED WITH PLATINUM), NON-MONETARY, UNWROUGHT OR IN SEMI-MANUFACTURED FORMS, OR IN POWDER FORM

 

What I’ve noticed is that in November Hong Kong net imported 15 tons of gold coin from the mainland (HKHS 98002)..

 

Hong Kong god coin import 11 2013

..and it net net exported  10 tons of gold coin to the US.

 

 

 

Schermafbeelding 2014-01-19 om 13.12.14

 

In 11 months Hong Kong net imported 45 tons of gold coin from the mainland and net exported 33 tons of gold coin to the US. This could be strong demand for Chinese golden coins, Panda’s, in the US.

 

 

Panda 2013 1 ouncePanda 2013 1 ounce2

 

 

 

In Gold We Trust

 

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Comments

  1. How do you say “Were screwed” in Mandarin?

  2. This New Old News is just Great!

    • yes, I’m getting a bit tired of SD posting these worthless types of articles. I think anyone with half a brain knows via HK is a tip of the ice-berg number.

    • Actually I like this article a lot. It’s the tunnel vision of SD stackers that gets to me more.

      China = lots of gold, won’t tell
      USA = no gold, pretends it’s lots
      Based on what?
      And forgetting that China is the world’s largest economy, and actively promoting private stacking. No pension fund delusions.
      Don’t be so silly as to suppose every ounce of gold flow “east” to be now part of China’s central bank reserves. Like sending a box of glazed donuts to a WW branch and expecting the full box to make it to the fridge, and be there the next day.

    • stackers? I’m falling asleep with these frivolous comments. Lets talk when you know more.

  3. An article on KWN with VonGreyez and Embry got me to thinking more about the German gold repatriation.  Germany supposedly owns 3,400 tons of gold, most of which is held in the NY Fed, France and London  I think we can conclude that NY and London are devoid of gold. The French are more likely to obey gold return requests from their powerful neighbor.  The reports that only 37 tons TOTAL was returned in a year with 5 tons from the Fed makes me think about that $3,400 a loaned my brother a few years ago.
    Brother is a banker and says he’s doing really well in the market.
     
    “Hey Bro’,  when ya gonna return that $3,400 you owe me?” 
      “Hey I’ll get you the $700.  You know I’m good for it–just cool your jets. I promise –6 months max”.
    6 months later and  I see my Bro
    He buys me a Subway $5 foot long. 
    He says that’s all he can afford but he’s good for it, you know.

    If the Rothchilds got out of the gold book in 2003 to play the market on the sidelines is DBank exiting (as are others or so it’s rumored)because there’s something sneaky going on. It’s not that the market is unprofitable.  Bankers do not play in unprofitable markets. They play to make money But playing markets where you have to be somewhat accountable is not good for banker’s health or profits today.
    DBank leaves and takes the gold it controls and holds because it knows the German gold is gone forever. They exit the danger zone and play on the margins, out of sight. Many other Bankers  and related people are leaving.  It’s becoming commonplace. El Erein of PIMCO is resigning.  The CEO of Dow Jones just quit.
    The RChilds left when gold was $400:  Dbank is leaving when gold is $1,200.  10 years and 200% increase in price is not a large spread. There’s a lot of upside possibilities.  $400 to $1,200 then $1,200 to $2,400 in short order. Gold was not scarce in 2003.
    Like another Silver Doctor essayist wisely said
    “Don’t wait to buy gold and silver. Buy gold and silver and wait’
    We’ve been watching the warm up acts and cartoon shows for 2 years.
    The main feature is coming soon.
     
     
     
     
     

    • Yeah Ag, NY Fed only sent 5 tonnes to Germany.  Hmmmm?  What more of a sign does the world need to conclude that the Fed doesn’t have the gold?

    • Why does USA not owning up to promises signal something being gone? Absolutely illogical.
      I have yet to give back 3 of the books loaned to me, and it’s been years. To conclude that I don’t have the books is presumptuous, and wrong. I have the books, even know where they are. 
      We cannot conclude anything fro US’s behavior. Gold defies logic. No motive exists to rush giving the gold back. Keep Germany happy? See gold as hostages. What happens when you’ve sent too many out safely?

      I also want to hear that US has used up all the gold that was not theirs. But it doesn’t make it more true.
      USA may well have ore gold than its claiming to. And giving it back slowly helps hide it. USA are well able to provide gold to other parties, so it’s clear they just DON’T WANT TO.

      Please apply more advanced logic into seasoning. Even though this website is a sucker for hyped ideas leading us to believe metals will spike up tomorrow if not still today.
      Wise enough to be stacking, but too nearsighted to notice the send layer of distraction. And there are more than that.

    • “we cannot conclude anything from US behavior (regarding the Germany deal)”
      I agree, why some make conclusions from this behavior is silly. It doesn’t mean there is a shortage of gold.   

    • Since we know USA could have done more (look at scrap exports for instance), yet hasn’t, the only options are:
      - They really don’t want to give it
      or
      - They want us all to think they ain’t got any gold.

      When things are off, most of the times our intelligence is being insulted. If you don’t get that, than it wasn’t an unjust insult.

    • XC Skater,
       
      I agree with your thoughts about Who’s got gold? How much gold does China/Fed have? All these moves and countermoves by The Fed and China regarding gold has made everyone jumping to the wrong conclusions, which both parties want. I am sure all of them have read Sun Tzu’s THE ART OF WAR, and are playing layers upon layers of deception.
       
      My personal thoughts, for what it’s worth (FREE = zero cents, LOL):
      China will announce they have 15,000 tons (at least) of gold. My suspicion is they are close to 20,000 tons. Why? Because they suspect the US Treasury has at least 10,000 tons (8150 US owned, plus the GLD stock, plus other countries’ gold they are holding in custody). China wants to have at least 50% more gold than The USA (if not 100% more), for safety reasons, after the global currency reset (GCR), gold re-pricing, and gold based trade settlement (maybe SDR?).
       
      The actions by the Federal Reserve to delay, recast, minimize the gold sent to Germany can be explained if you think from the standpoint of the US Treasury. The Fed does not own any gold. The US Treasury Department owns the US gold. The Fed banks hold other countries’ gold and do not own these. The reasons they will not allow any audit, and send only a token amount (to Germany) are: The US Treasury has physically taken it off from the Fed Banks; The US does not want everyone else to know how much gold we have, in order to be able to spring a big surprise to those working on the assumption we do not hold any (or just a miniscule amount); And to deprive the other countries of gold that they need after the GCR.
       
      Why do you think China is accumulating gold in a big hurry? It is the same reason the US is hiding its true holdings. I would suggest that the gold that was sold into the world by the bullion banks, are other countries’ gold stocks. So each player in the poker table are holding Four Aces or Straight Flush. Now the question is – Is the Joker part of the deck? In a full deck of cards, there are 2 Jokers, and JOKERS are WILD. What is the 5th card held by the US (4 aces) knowing China has a straight flush. It is almost time to – Show Hands.

      The Art of War emphasizes deception as a major weapon. To make your opponents miscalculate, and allow you to win by default. By hiding, refusing audits, sending minimal gold that was recast; all of these are to make intelligent (hehehe) analysts draw a conclusion – The Fed has no gold (which is technically correct). No one has mentioned the US Treasury, as the true holder/owner of US gold, have they? They want everyone to think, THE END IS NEAR !!! Well, has everyone realized how long it has dragged on? Longer than you think it could, right?

      So, to be totally contrarian – The US Treasury has gold and lots of it. China is acquiring gold and lots of it, plus their mining output. Maybe Jim Willie’s incredible assertion that 1,000 tons of gold per month going into China for the last 18 months could be accurate? 20,000 tons anyone? Or maybe, 1 million US$ per ounce of gold? Since I am just spouting nonsense, might as well bump up the numbers, hahaha !
       

  4. What gold?
    Silly paper gold.

  5. The sooner China whips it’s pants down and shows off it’s unusually large gilded tallywhacker the better. Not that I am into that sort of thing but, you know.
     
    There was news they may be set to announce an update to their reserves. Just friggin get on with it already so we can get the party started.

  6. Multiple people have told me they had “enough” or even “too much” PM. They never were able to explain me that notion.
    If *gasp* PM’s might perform a bit less than we anticipate, or we lose our temper, get out and pick the wrong next asset class, it won’t hurt to have a bit more. No-one thus far has name me a 2025 price expressed in PM’s for the vineyard I’m eyeing. Until someone does, I will presume I need a bit more than this.

  7. I didn’t know China was buying all the gold, yea right!!  does that mean I have turn mine in to help the economy over here? Mnnnnnn Now let me think about that. Fuck it! So China is buying all the gold, what the fuck, hell, they won’t get mine and don’t worry about the West they will get theirs back when the Chinese start starving and the West will have to supply them with very expensive Rice and Soy Beans. Lol Keep Stacking and Protect Yourself.

  8. Ignoring all the illegal mining China is doing in South America and Africa. They have way more gold than they are publicly admitting.

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