MKS: China could double gold imports in 2-3 years

Author: Paul Ploumis
13 Apr 2015 Last updated at 08:23:26 GMT
ABU DHABI (Scrap Monster): According to Frederic Panizzutti of MKS Precious Metals, Chinese annual gold consumption could double to over 2,000 tonnes within the next two to three years. The opening up of the International Board is expected to bring more liquidity to the Shanghai market. The views were expressed during a panel discussion held on the sidelines of the Dubai Precious Metals Conference 2015 being held from April 12th to 13th at Atlantis The Palm, Dubai.

According to Panizzutti, China still has untapped potential for gold demand. The per capita consumption rate in the country is 0.65 grams, significantly lower when matched with 6.4 grams in Hong Kong and 4.94 grams in Dubai.

Currently, India competes with China as the world’s top consumer of the yellow metal. Official figures released by the World Gold Council (WGC) suggest that India with net gold consumption of 842.7 mt has regained the top spot in 2014. Chinese gold imports had totaled 813.6 mt. However, the demand in both countries declined during the year when compared with 2013. The gold consumption by India and China in 2013 had totaled 974.8 mt and 1,311.8 mt respectively. Although Chinese economic growth in 2014 hit the slowest rate since 1990, it is likely to outpace that of India in the coming years. The Chinese gold demand is likely to exceed 2,000 mt in the next two to three years.

The Chinese gold trade momentum is likely to escalate, especially with the launch of the International Board. This will open up the market to large number of new participants. In an attempt to boost the country’s gold market, the shanghai Gold Exchange (SGE) and WGC had proposed plans to transform Shanghai Free Trade Zone as the central hub for gold trade in the region. Dubai is also expected to play an important role in the flow of gold to China.