China Playing a Major Role in Global Silver Market

The latest report from the Silver Institute reveals what most participants of the silver market suspected- China has become the largest physical market for silver in the world.
The report indicates total Chinese silver demand has grown to a whopping 170.7 million ounces annually, from just 70 million ounces a decade ago.
Chinese investment demand for silver reached 17 million ounces in 2011, up from 9.8 million ounces in 2009.
As with China’s gold accumulation, it is likely that China’s unofficial hoarding of silver vastly exceeds the publicly admitted 17 million ounces annually.

Full report below:

 

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Silver Institute Press Release:

(Washington, D.C. – December 13, 2012) China’s role in the global silver market has dramatically changed over the past decade. Once a small player in the global market, China today is the world’s leading market for both physical investment and paper trading of silver futures and other similar products, and is the second largest silver fabricator today. Chinese demand for the white metal is expected to achieve further strong growth in the years ahead, according to a report by Thomson Reuters GFMS released today by the Silver Institute.

Total silver demand in China has grown by over 100 million ounces (Moz) in the past ten years, to a record 170.7 Moz. The strength of the Chinese economy, assisted by a boom in the manufacturing sector, along with heavy investment in infrastructure, has boosted domestic demand for silver since the liberalization of the Chinese silver market at the start of 2000.  This has propelled China into becoming the world’s second largest silver fabricator, with its share of global demand standing at 17 percent at the end of 2011.  Overall silver fabrication demand has grown from 67.1 Moz to 159.5 Moz during the period 2002-2011, a rise of 137 percent.

In the same time period, Chinese industrial silver fabrication experienced an almost uninterrupted period of growth, posting an impressive 135 percent increase.  The largest slice of industrial demand has come from the electrical and electronics sector, rising from 17.1 Moz in 2002 to 40 Moz last year.  Key to this development has been a rapid expansion in the country’s semi-conductor sector.  Similar growth across a wide range of applications has also occurred, including a surge in cell phone and computer production to account for 70 percent and 90 percent, respectively, of the global total last year.  Additionally, strong advances have been reported in other personal electronic goods, including tablet computers, notebooks and light emitting diode backlit televisions.

Moreover, the Chinese silver jewelry market has grown an impressive 211 percent from 2002-2011, to 54.4 Moz, as it enjoys greater exposure across the country’s interior.  Further growth is expected in coming years as ongoing urbanization should lead to the expansion of retail jewelry outlets in larger cities.

Chinese silverware fabrication nearly doubled over the last decade, making China  the second largest silverware fabricator globally behind India.

Investment demand from Chinese silver investors has jumped in recent years, making China the world’s biggest market for both physical investment and paper trading of silver futures and other similar contracts.  Of note, during the first full year after the liberalization of the Chinese silver investment market in 2009, net demand for silver bars and coins doubled to 9.8 million ounces (Moz).  In 2011, the figure soared to 17.0 Moz, accounting for 8 percent of global net purchases of silver bars and coins.

On the supply side, Chinese mine production has almost doubled over the last decade, assisted by the base metals mining sector, leading to a sharp rise in silver produced as a by-product.  China’s mine production of silver now accounts for 14 percent of global supply, and it is likely to be recorded as the second largest silver producing country in 2012.

Scrap supply has also risen steadily over the same period, as Chinese industrial fabrication has grown rapidly, lifting supply from this segment to 31.9 Moz last year.

A notable increase in government sales from China was an important feature of the silver market from 1999 to 2003.  Thereafter, sales from Chinese official and quasi-official stocks fell markedly, and the country has been essentially absent from the market since 2006.

“This report underscores China’s growing importance to the global silver market,” stated Michael DiRienzo, Executive Director of the Silver Institute.  “It is impressive to see the dramatic development in so many sectors of their domestic silver market in the last decade,” he added.

The report gives a historical background of China’s silver industry over the past 30 years.  It examines the deregulation of the Chinese silver market and includes chapters on Chinese silver supply, silver fabrication demand and silver investment, as well as silver imports and exports.

The report is available free of charge and can be downloaded from the Silver Institute’s web site:  http://www.silverinstitute.org/site/wp-content/uploads/2012/12/ChineseSilverMarket2012.pdf

The Silver Institute is a nonprofit international association that serves as the industry’s voice in increasing public understanding of the many uses and values of silver. Established in 1971, its member companies include leading silver mining houses, refiners, bullion suppliers, manufacturers of silver products and wholesalers of silver investment products.

Comments

  1. With the silver prices dropping, I bet the Chinese are in buying and “taking delivery” mode, on large scale.

  2. I’m Buying Also. Just drove an hour to the LCD and picked up these sweet little 90%’s I Did My Duty. Keep Stacking

  3. I would bet that China is a large player in the paper suppression of PMs. They want phyzz and they have U.S. bonds. They are in deep with Wall St. So why wouldn’t they use their fiat to knock down the price of the physical metal. They are criminals too. It’s a race to acquire as much as one can & fast. The manipulation works to their advantage. Where there is smoke there is fire as they say.

  4. There’s a rumor that Goldman Sachs is the facilitator for the Chinese manipulation of the precious metals market.  Now that the Sleeping Giant known as China is fully awake, we can only watch how they enter the market more fully that even JPM and others who have paved the path that allows China to assume the mantle of senior silver supression market maker.
    What comes around goes around. The Chinese have  centuries-long memory of being hosed by the western powers. Now that they are absorbing 170 MOZ of silver this year and more next year, India coat tailing along with nearly as much silver acquisitions, this country has a very large dog in the fight. 

    • WHEN the Chinese supplant JPM as THE silver and gold manipulator, THAT will be when the CFTC finally pulls their heads out and notices that these markets are being manipulated… and not a moment before then.  :-(
       

    • The only thing that I know for sure about Goldman Sucks is that they will all be facilitating the operations of the furnaces of Hell one of these fine days… sweating and shoveling LARGE chunks of coal into those huge boilers… and good on ‘em, too!
       

  5. When Silver gets more scarcer no amount of manipulation is going to stop it from going up. I also read that AGXIIK that Goldmans and others where Selling Shorts and where Buying Longs but for the life of me, I can’t find the article.

  6. M454  I think it was Doc who had a quick mention of the chinese silver market manipulation.  I scoured the internet and found an article about  3-4 weeks ago, maybe on SGT, and it was just a hint of the GS/China connection but it all made sense when you think that they want to acquire all types of PMS and from all sources from takeovers of mine stocks in Australian and in other countries, development of mines in Africa and South America, taking advantage of bad bank bets and the manipulation of the markets. Why not?  They are a sovereign country and there is no law against it. Just foolish people who set themselves up for this frog march of PMs into the Middle Kingdom.    There will be more about this soon enough once the evidence is supported by actual examples of China markets working these systems like a day job.

    • China is smart and their long term planning goes out decades instead of 4 years like the US. They will eventually see the collapse of the western economies while they take over as the economic powerhouse.

    • The Chinese are not just “seeing the collapse of the Western economies, Mary, they are doing everything in their power to help cause it and make it as bad as possible.  Not that Western “leaders” need a lot of help in the Economic Stupidity area, of course. 
       
      “Just foolish people who set themselves up for this frog march of PMs into the Middle Kingdom.”
       
      Payback is such a b**ch, isn’t it?  China is likely still PO’d about the opium trade, the loss of their national silver hoard, and what the Brits and other Western nations did to them in the 18th and 19th centuries.  Culturally, they have a VERY long memory and now they have a chance to stick both of their thumbs into Western eyes… and they will too!  I just wish that the fools running the Western governments were not aiding and abetting these Chinese actions.  :-(
       

    • I had seen an article about a year ago about the Goldman Sachs/China partnership. Goldman Sachs has been building MASSIVE, GIGANTIC (The Largest Warehouses Ever) in China. They have been filling these warehouses with coal, copper ore, iron ore, rare earth metals ores, grains of all sorts… every commodity one can think of! I “Searched” for that story the other day to post in the room and could find no mention of it!!! The original story even had satellite images of these warehouses. There were rows and rows of them.

  7. Good Morning everyone!  We’re still here  I guess the Mayans missed the end of the world.  In my estimation they have a wicked sense of humor.  If they could predict the end of the world, they probably also predicted the mess we would be in today.  So instead of the world ending, we get to face 2013.  This will be a doozy.
    RGR  I recall that story too.  It was well over a year ago.  It stands to reason that these warehouses are for storage of the enormous amounts of commodities the Chinese have been buying in the last couple of years.  Many mining and commodity firms got fat selling to the Chinese but that is started to subside. Australia is feeling that.  If the Chinese are using the funny money reserves to buy these hard assets as well as hundreds of mines, spending billions to buy oil sands producers as well as billions in Africa,  they may just end up being able to produce a large amount of their own prepper stocks without the need to foreign commodity brokers and suppliers.

  8. Here is what Pastor Williams said recently:
    It should be obvious when there is going to be a real problem. The Federal reserve contract ends this December. The crutches that have been supporting the dollar will be gone. All that had to be done was creating a new money and doing away with the FED. During Christmas America will be sold to China.
    How come nobody is talking about the fact that Sunday, the Fed’s contract expires? Is this why Steve Quayle’s banker source gave people until December at the latest to close all equity accounts???
    Any correlation? China will apparently own America?

  9. @Proverbs1616 Do you have a link? I haven’t heard him say China is going to own America and the dollar is not ready to be crushed yet and Pastor Williams say’s it’s going to be 1-4 years before the economy collapses and there will be no Fiscal Cliff as the Elites are not ready yet as we aren’t in enough debt yet.

  10. Yes, China is getting big. Questions. Are we to believe that China has a world class education system? Many jobs over there are hi-tech. Are we to believe that China has the best educated leadership? Many in the US are Ivy league educated from educated parents. Are we to believe that the lack of Christianity in China opened the door to economic superiority? No,no, and no. I think the reason our plutocracy abandoned America, American jobs, and America’s future is because of niggers. There is just no way around their cultural hate for America and whites. In this context, The only way to get rid of them is to take out us too. 

    The problem I have is so many people still think in the old paradigm. We are not what we were just 50 years ago.

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