China Gold Imports from Hong Kong: Steady in June 2013

In June 2013, the gold imports from Hong Kong to China were essentially flat.
The summer isn't a good period for gold either, so this is pretty normal. But anyway, gross and net imports are still at an all time high, compared to history (see chart 2).

And what's also interesting is that the ratio between net imports and gross imports are at an all time high too: 89%. China wants to keep all its gold.

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China Gold Imports Edging Upwards in May 2013

The gold imports in May 2013 were a bit disappointing again, gross imports didn't budge much.

But the net imports surged to 106 tonnes in May 2013, meaning that China kept all the imports from Hong Kong. The ratio of net imports to gross imports is 83%.

But it's still a positive development for the gold market, net imports continue to trend higher.

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China Gold Imports from Hong Kong in April 2013: Disappointing

The China Gold Imports from Hong Kong in April 2013 came in lower than expected, but still very high. I had hoped for a higher number with the decline in gold price...

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China Gold Imports Hit Record High

An update on the China Gold Imports from Hong Kong has just been put out on Bloomberg. It is amazing, how much they are buying, imports more than doubled.

http://katchum.blogspot.be/2013/04/china-gold-imports-from-hk.html

And the thing is, the massive drop in the gold price in April is not even counted in the numbers yet.

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China Gold Imports from H.K.

This page is created to monitor China Gold Imports from Hong Kong.

I'm monitoring the gross imports, net imports from Hong Kong to China.
I'm also monitoring the ratio between net imports and gross imports which measures the degree of retaining of gold by China.

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China Gold Imports from Hong Kong Disappoint

China gold imports plunged in January: 51 tonnes. This was not expected, considering the low gold price in January 2013 ($1660/ounce). The result was a 5% decline in the gold price in February ($1580/ounce).

Chart 1: China Gold Imports from Hong Kong

Net imports were 19.58 tonnes. That's 19.58/51.3 = 38%. That's a steep decline from the previous month, which was 74%.

I don't expect February to be much better as we have the Lunar New Year and a shorter month.

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December 2012 China Gold Imports Hit Record Level

As predicted here, China bought gold like there was no tomorrow in December 2012 as gold prices fell to a record low. They bought 114.4 tonnes. I believe January will be a good month too.

Chart 1: China Gold Imports from Hong Kong

Net imports were 84.7 tonnes. That's 84.7/114.4 = 74%. That's a record high, even higher than the 68% in November 2012. This means China isn't even trying to export its gold to Hong Kong anymore. It's scooping up all the gold they produce!

I say: "Follow the money!"

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China Gold Imports Down in October 2012

China imported less gold from Hong Kong in October, the lowest since March 2012: 47.48 tonnes.

The net imports of gold from Hong Kong to China were 47.48 - 23.6 = 23.88 tonnes. This is 23.88/47.48 =   50% of gross imports. The previous month we had 60% net imports from Hong Kong to China.

So not only did China import less gold from Hong Kong, it also exported more of its gold back to Hong Kong compared to its gross imports. Looks like China isn't interested in gold lately.

It also partly explains the drop in the gold price starting in October 2012.

Chart 1: China Gold Imports from Hong Kong October 2012

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Chinese Iron Ore Imports Make New High

If you are concerned about the Chinese economy, you shouldn't. Chinese exports for the month of September came in at $186 billion, a 9.9% increase year over year.

We did have a little dip end 2008 where exports fell to about $65 billion, but since 2009, the Chinese kept growing their exports as you can see on Chart 1.

Chart 1: Chinese Exports

As Zerohedge's chart points out, exports and imports are mostly equal. If exports move up, imports will move up too. Mostly exports are higher than imports as China has a trade surplus.

The thing to consider is that if exports go up, imports will go up and as a result, commodities will go up in price (Chart 2). We had 3 months of consecutive drops in imports, but September has made an end to that. In September, China imported a record amount of iron ore, the highest since January 2011: 65 million tonnes. Also copper imports jumped to a 4 month high.

Chart 2: Chinese Exports - Imports

On Chart 3 you can see that 65 million tonnes of iron ore imports isn't that much compared to the previous months, but it's a start. China has started a 1 trillion yuan stimulus and we will certainly see the effects of this in the coming months.

Chart 3: China Iron Ore Imports

To see how to profit from this, read more here.

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China Gold Imports from Hong Kong Plunge

According to the Chinese government gold imports in the month of August 2012 plunged to 53.5 metric tonnes from 76 metric tonnes a month earlier. As you can see this is a significant drop. It can be partially attributed to the increased production of Chinese gold because China produced 41.4 metric tonnes in August, which is 12 metric tonnes more than the average of 30 metric tonnes of gold produced per month in China since 2012.  China produced 250 metric tonnes of gold since 2012.

Chart 1: China Gold Imports from Hong Kong

If we look at net gold imports from Hong Kong to China on balance, we have 29.3 metric tonnes of net imports, which is back at the lows of January 2012 (Chart 2). Far less than the net imports in April - July 2012.

At least it is still in line with the 2012 numbers, but I had hoped China would buy more gold.

Chart 2: China Net Gold Imports from Hong Kong

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China Gold Imports drop another 10% in June 2012

China Gold Imports have dropped another 10% from the previous month.

Although we see decreasing demand from China for gold, China says it will keep buying more this year as the precious metals market is set to grow throughout the second half of this year. Analysts say physical demand is still strong.

Chart 1: China gold imports from Hong Kong

Instead, China is buying more and more U.S. treasuries.

Chart 2: China U.S. treasury holdings

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China May 2012 Gold Imports from Hong Kong Still in an Uptrend

A little update on China's gold imports from Hong Kong. For May 2012, China imported 75.6 metric tons from Hong Kong. Pretty disappointing if you ask me, but the trend is still going up. The May 2012 imports are a sixfold increase from a year earlier, but down from April 2012's record.

Chart 1: China Gold Imports from Hong Kong

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Baltic Dry Index Reacting to Iran Oil Embargo

Since Europe banned crude oil imports from Iran on 1 July 2012, the Baltic Dry Index has shot up 10% already from 1000 to 1103 (Chart 1). The reason for this spike isn't because Europe is banning crude oil imports from Iran, but rather the consequence of it. Due to this ban, Iran has renewed its threat to close the Strait of Hormuz. Approximately 20% of the world's oil, which is about 35% of seaborne traded oil, passes through this strait. As this strait is closed down, commodity transport vessels need to make a detour, which will increase the price of oil and increase the tanker rates. The availability of tankers will go down due to this forced rechartering of routes, which will decrease oil supply. As a consequence oil tankers will store oil in anticipation of rising oil prices and this will be beneficiary to the tanker industry. On 4 July 2012, the situation even got worse, with Iran threatening to strike 35 U.S. military bases within minutes. We will see that these events will be beneficial to the Baltic Dry Index and oil prices in general.

To read the full analysis go to my article here: Frontline: How to Profit from the Iranian Oil Embargo.

Chart 1: Baltic Dry Index

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China is Buying Record Amounts of Gold

As I already feared, China is scooping up all the gold in the world and is becoming the foremost gold buyer in the world. Trying to get more and more exposure to the reserve currency status.

Today it was released that China imported approximately 104 tonnes, a staggering amount of gold!

The chart looks something like this:

Chart 1: China Gold Imports

From Shanghai Daily:

GOLD imports by China's mainland from Hong Kong rose 65 percent to a record in April, up for a third straight month as investors sought a hedge against financial market turmoil and an economic slowdown.

Shipments totaled 103,644.5 kilograms in April from 62,913 kilograms in March, according to export data from the Census and Statistics Department of the Hong Kong government yesterday. In the first four months, imports were 239,174 kilograms from 27,114 kilograms a year earlier, according to Bloomberg News calculations. China doesn't publish such figures.

Increased imports by the second-largest consumer after India may help extend a rebound in the precious metal that's been driven by speculation the US Federal Reserve may add to stimulus this month to boost the recovery. Spot gold rallied 4.1 percent on June 1 after US jobs data missed hopes. China's central bank may also be boosting holdings, saidWang Xinyou, a senior analyst at the Agricultural Bank of China Ltd.

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How Gold Mines Will Benefit From the Second Great Depression

During the Great Depression in 1932, gold went up while utilities (energy, oil) went down. Oil companies were almost all going bankrupt. What happened to gold mines then?

Every company has revenue and costs. Revenue from a gold mine comes from the gold they mine and sell. This asset was very precious to people, so gold mines benefitted from the gold price going up. Costs were going down as oil went down due to the worsening economic outlook during the Great Depression.

So, when revenue goes up and costs go down, margins start to increase a lot. This is what happened during the Great Depression and this will happen once again now.

To find out, go to: How Gold Mines will Benefit from the Coming Depression

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China Gold Imports from Hong Kong

In December of last year there was a big concern that China would stop importing gold due to lack of demand. This was derived from the fact that gold imports from Hong Kong to China dropped 62% in December 2011. As a consequence, the gold price plunged from $US 1700/ounce to under $US 1600/ounce.

Lately though, the gold imports from Hong Kong to China have stabilized around 40 tonnes/month (Chart 1). This drop of 62% seems to be huge, but when we look at the long term chart the picture is entirely different.

Go HERE to read the entire article.

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