Monday, September 28, 2015

LAWRIE WILLIAMS: Latest SGE gold deliveries suggest enormous 2015 total of over 2650 tonnes!

"The huge level of weekly Shanghai Gold Exchange delivery numbers is becoming something of a repetitive news item and is perhaps losing its impact, but it shouldn’t.  Week 37 (ending September 18th) saw another 63 tonnes delivered out of the Exchange, which makes the year to date total 1,892 tonnes – 281 tonnes more than at end week 37 in the massive 2013 record year for Chinese gold consumption.  If we extrapolate from the year to date figure this would suggest total SGE gold withdrawals for the year would come to an enormous 2,650 tonnes or higher – equivalent to over 80% of total global supply of new mined gold.  With SGE deliveries usually rising late in the year in the long build-up to the Chinese New Year, which falls on February 8thnext year, we certainly shouldn’t discount the likelihood of this level being achieved, or even bettered.  There seems to be no slowdown happening as yet.
Overall, SGE deliveries started to pick up in early July (normally one of the weakest months of the year) and have averaged 62 tonnes a week since then.  The figure for the week ended September 11th was the third highest weekly total ever
12 week withdrawal figures on SGE to September 18th
SGE Withdrawal week ended
Physical gold withdrawn
July 3rd
44.3 tonnes
July 10th
61.8 tonnes
July 17th
69.2 tonnes
July 24th
73.3 tonnes
July 31st
53.3 tonnes
August 7th
56.1 tonnes
August 14th
65.3 tonnes
August 21st
73.0 tonnes
August 28th
59.9 tonnes
September 4th*
36.8 tonnes*
September 11th
73.7 tonnes
September 18th
63.2 tonnes
729.9 tonnes
*September 4th figures are for a three day trading week with the Exchange closed for the Chinese Victory Day celebrations on the Thursday and Friday.
These figures fly in the face of the same mainstream analysts’ estimates of Chinese demand this year, which they say is slipping, along with the nation’s declining GDP growth rate – although this is still currently estimated at over 6% .  The disparity between the SGE figures and the analysts’ assessments of Chinese consumption is ever growing – and this year looks as though the difference by the year end may be as much as 1,500 tonnes or more.   
As we have noted before, a significant proportion of the difference is down to how the analysts estimate ‘consumption’.  Demand categories such as gold used in financial transactions tends to be ignored by the analysts, yet this is still gold flowing into China and in terms of gold movement from West to East remains hugely relevant..."


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