CHINA Gold glittering once again with first-half output rising over 14%

CHINA

Gold glittering once again with first-half output rising over 14%

China Daily

08:18, July 28, 2022

China saw output of 174.69 metric tons of gold during the first half, up 14.36 percent year-on-year, with supply of the yellow metal likely to continue rising in the second half as mining operations gradually return to normal, said an industry report on Wednesday.

Employees sort gold ornaments at a jewelry shop in Huzhou, Zhejiang province. [Photo by Ni Lifang/for China Daily]

Domestic output of the precious metal rose as major gold-mining areas-including Shandong province-have resumed operations, according to the China Gold Association.

Major gold mining companies saw output of 73.55 tons of gold during the first half, accounting for 52.85 percent of the country's total and 3.54 percentage points higher than a year prior.

Meanwhile, the major gold companies have been continuously expanding their overseas business, which led to a 48.42 percent year-on-year rise in their overseas mining output, it said.

Zhu Yi, a senior metals and mining analyst at Bloomberg Intelligence, said global gold supply may finally recover from COVID-affected operations in 2020 and 2021, rebounding by between 3 percent and 4 percent.

"Gold-sector mergers and acquisitions could be a focus as producers seek to expand reserves, lower costs and improve efficiency, with strong cash flows looking for a home after 2020-21's rapid balance sheet deleveraging," Zhu said.

According to the association, China consumed 476.82 tons of gold in the first half, down 12.84 percent year-on-year.

Consumption of gold jewelry in China dropped 7.98 percent from a year earlier to 320.73 tons during the first six months, while consumption of gold bars and gold coins dropped 25.59 percent to 112.44 tons. Gold purchases for industrial applications and other uses dropped 7.89 percent to 43.65 tons, it said.

However, the decline narrowed significantly in the second quarter and gold consumption has regained growth momentum in June. It is expected to maintain a sustained recovery trend, said the association.

Zhu said that although investment demand for gold and gold products may not match 2020's strength, overall investment demand may remain robust this year.

"After global physical gold demand rebounded strongly across most downstream sectors in 2021, the outlook for jewelry and industrial applications is more tenuous into the second half as a slower economy and high inflation squeeze consumer spending," she said.

Terms of Service & Privacy Policy

We have updated our privacy policy to comply with the latest laws and regulations. The updated policy explains the mechanism of how we collect and treat your personal data. You can learn more about the rights you have by reading our terms of service. Please read them carefully. By clicking AGREE, you indicate that you have read and agreed to our privacy policies

Agree and continue