Koos Jansen
BullionStar Blogs
Koos Jansen
Posted on 4 Sep 2015 by

Record Monthly Gold Export UK to China

The UK net exported a record 32.4 tonnes of gold directly to China mainland in June 2015.

In 2014 the conventional conduits of bullion flows to China, from all around the world first to Hong Kong and then to the mainland, have been replaced by direct exports. For example, the UK is exporting bullion directly to China since April 2014 – as I reported at the time. The result of the rearrangement in these gold flows is that Hong Kong’s export to the mainland has lost its accuracy as an indicator for China’s gold hunger. In a few posts we’ll have a look at trade data from several gold exporting nations and trading hubs to grasp how much gold China is importing this year.

Starting April last year, UK shipments of gold directly to China have been going up. In June 2015 the UK net exported a record 32.4 tonnes of gold to China, up 6.5 % m/m, up 116 % y/y.

UK - China Gold Trade 2012 - June 2015
Exhibit 1.

Let’s see if we can learn some more from the UK’s trade data. Remarkably, the UK became a net importer of gold in June with 2 tonnes net imported. Falling total gold exports and rising total gold imports caused this. Concluding, although China imported a record monthly tonnage from the UK in June, the Brits did not suffer a net outflow because of concurrent strong imports into London. UK total gold import in June was 49.3 tonnes, compared to a gold net export to China at 32.4 tonnes. Have a look at the below chart for some clarity.

UK Gold Trade 2012 - June 2015
Exhibit 2.

In the above chart, we can see the UK’s total net export has been going down in the past few months (black line), although we know that net export to China has increased (exhibit 1). Who was exporting gold to the UK to be sent forward to China? In June it was the US at 19.5 tonnes, which was the highest amount since February 2012, and Canada at 18.4 tonnes.

Chinese gold wholesale demand measured by SGE withdrawals was high in June at 196 tonnes (exhibit 2). We shall see what the supply composition (mine/import/scrap) was of SGE withdrawals when gold export data from more countries is released.

Koos Jansen
E-mail Koos Jansen on:

  • rowingboat

    “Remarkably, the UK became a net importer of gold in June with 2 tonnes net imported”

    Two things catch my eye in 2015, Koos:

    1) Continued falls of the Turkish Lira and record local gold prices have seen outflows from Turkey to Switzerland and UK. Since 1982 this is very rare. Except for 2009, Turkey has always been a net importer from Switzerland.

    2) Hong Kong’s net imports are way down, just 36 tonnes in the first half of the year by my calculation. I’ve yet to update the latest monthly data but this is what I have for net imports to HK plus China (USA, Switzerland, UK and HK sources) combined:

    net imports 2013: 1407mt (China) + 615mt (HK) = 2,022mt
    net imports 2014: 1153mt (China) + 253mt (HK) = 1,406mt
    net (so far) 2015: 585mt (China) + 36mt (HK) = 621mt

    I’m expecting outflows to resume from UK and increase in the latter half of 2015 as data becomes available (India + China). At some point I expect the USA to flip back to a net importer again as well.

    • JanNieuwenhuijs

      1) Hmmm. Turkish gold deposits used for BB in London? What are your thoughts.

      2) You forget Australia and Singapore. Hopefully I have some more handles on H1 Chinese gold import next week.

      • rowingboat

        We know from the historic trade data that 2-way flow occurs between UK and Turkey, particularly exports from UK to Turkey in 2013/14. This year shows that those established channels are obviously reversible, correlating with record highs in Lira terms.
        Your post is a catalyst for me to update my data, looking forward to more

        • Russ

          Could it be the settling of physical leases between UK and Turkey that are in motion? It would have to be something that paper wouldn’t cover.

      • Matthew

        My estimate of 1H China imports is 750t one way, and 625t+50t (depending on if I include Australia) another way. I’d probably settle for 700t. Last year about 615t using same methodology.

        • JanNieuwenhuijs

          Thanks Matt. Let me gobble up all the numbers and see if I come to the same conclusion.

  • Au_Nuts

    Move along sheeple…nothing to see here. Move along…turn on your TVs to obtain your daily opinions…the Donald is spewing racist nonsense while Hitlery is busy explaining how her use of private email didn’t put her nation’s security at risk – unlike the actions of Chelsea Manning, Edward Snowden and Julian Assange.

    (It’s not like we’re in a global currency war or something…and it’s not like China dumping a record USD 94 bn of Treasury Bonds last month is relevant in any way).

    In gold we trust. Everything (everyone) else…not so much.

    Just keep stacking.

  • alexcyril

    hello friends, my name is maria burgos i want to testify on how i was cured of my diabetes by herbal doctor chima okereke, i have suffered from diabetes for years and have been to different hospitals for cure but all effort was in vain. so while i was on net i saw so many testimony’s about doctor chima okereke on how he cured so many diseases and virus so i decide to contact the said doctor and explain to him about my diabetes so he promise to cure me after all arrangements have been made he prepared the herbs and sent to me in my country and i took it behold i was totally cured,now i’m happy to testify that i’m cured of my diabetes, so if you are suffering from diabetes and you want a total cure contact Doctor chima okereke on drchimaokereke@gmail.com or call him on +2347067847693

Copyright Information: BullionStar permits you to copy and publicize blog posts or quotes and charts from blog posts provided that a link to the blog post's URL or to https://www.bullionstar.com is included in your introduction of the blog post together with the name BullionStar. The link must be target="_blank" without rel="nofollow". All other rights are reserved. BullionStar reserves the right to withdraw the permission to copy content for any or all websites at any time.