Market brief
China's August Gold Imports Jump 39%, Lifting Year-to-Date Total to a Record
Lower prices, a stronger yuan and persistent domestic premiums pulled bullion into China as banks spent remaining import quotas, while Shanghai copper cathode inventories fell to their lowest since December 2023.
By PREVICT Research
Key points
- China imported 141.7 tonnes of gold in August, up 39.3% year on year, taking year-to-date inflows to a record 1,141.2 tonnes, 72.2% higher.
- Shanghai copper cathode inventories fell 14,700 tonnes to 43,900 tonnes, the lowest since December 2023, while Indonesia's Morowali park ordered nickel pig iron output curbs of up to about 100,000 tonnes.
- COTR data show copper net longs at 42,132 lots, the lowest since late March and a sixth straight weekly decline, even as prices rose.
China imported 141.7 tonnes of gold in August, up 39.3% from a year earlier, lifting the year-to-date total to a record 1,141.2 tonnes, 72.2% higher. Lower prices, a stronger yuan and persistent domestic premiums encouraged the inflows, and banks also drew on remaining import quotas under the licensing regime the People's Bank of China introduced in June.
Chinese gold ETFs added about 44 tonnes through August, an 18% increase from the start of the year, according to the Shanghai Gold Exchange, while global ETF holdings were broadly unchanged. The divergence points to demand concentrated in China rather than a worldwide shift into bullion funds.
Copper shows the same physical pull. LME copper extended gains for a sixth consecutive session on Tuesday, its longest winning streak since May, before easing slightly on Wednesday morning, as tight conditions in China supported prices. Shanghai copper cathode inventories fell 14,700 tonnes to 43,900 tonnes, the lowest since December 2023. Falling stocks, holiday restocking and seasonal demand ahead of the Mid-Autumn Festival and National Day holidays lifted consumption, and although imported arrivals have increased, most material has flowed directly to fabricators rather than into warehouses, keeping spot supply tight.
Supply is tightening as well. Indonesia's Morowali Industrial Park has instructed nickel pig iron producers to curb output because El Niño-related drought is straining the water supplies needed for processing. The curbs could affect around 100,000 tonnes of NPI production, against the park's annual capacity of roughly 4.2 million tonnes.
Investor positioning has not tracked prices higher. COTR data show net bullish copper positions fell 3,981 lots to 42,132 lots, the lowest since late March and a sixth consecutive weekly decline. Aluminium net longs dropped 11,623 lots to 77,423 lots, largely through long liquidation, and zinc net longs fell 2,787 lots to 29,946 lots, a fourth straight weekly decline.
The record gold inflows and the copper inventory draw share a mechanism: domestic prices and premiums make it profitable to move metal into China, and that metal is being consumed rather than stockpiled, so visible stocks fall even as arrivals rise. The positioning data suggest the price gains are not the product of crowded speculative length. A sustained rise in gold prices or a weaker yuan would erode the arbitrage behind the inflows, and a rebuild in Shanghai copper cathode inventories from the 43,900-tonne low would show the holiday restocking has run its course.
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