China's first-half gold output falls, consumption up

Shanghai (July 28)  China's gold output fell by 9.85 percent from a year ago to 206.542 tonnes in the first half of 2017, state media said on Friday, citing data from the China Gold Association.

The country's consumption, however, was up by 9.89 percent to 545.23 tonnes over the same period, said the People's Daily, leading to higher imports by the world's top gold consumer as indicated by data out of Hong Kong on Thursday.

China's gold mineral output stood at 178.46 tonnes in the first half, while gold extracted from non-ferrous metals came in at 28.082 tonnes, People's Daily reported. Another 34.947 tonnes was produced from imported raw materials, up 27.05 percent from the previous year.

The higher consumption was mostly for gold bars, which recorded a 51.09 percent increase from a year ago to 158.4 tonnes. Gold jewellery consumption dropped 0.26 percent to 330.77 tonnes.

The rise in consumption and fall in output so far in 2017 reverses the trend seen last year. China's production edged up 0.76 percent to 453.49 tonnes in the full year 2016, while consumption fell by 6.74 percent to 975.38 tonnes.

"We're seeing in general a decline in domestic Chinese output of a lot of commodities, in part because of their relatively high costs," said Daniel Hynes, senior commodity strategist at ANZ.

"With international prices relatively low, it has been cheaper for consumers to buy on the international market."

Spot gold was trading at $1,257.81 per ounce at 0507 GMT on Friday, having retreated from a six-week high hit in the previous session. Data emailed to Reuters on Thursday by the Hong Kong Census and Statistics Department showed China's net gold imports via Hong Kong, its main conduit, rose to 70.16 tonnes in June from 45.031 tonnes in May.

Reuters