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A new report from the China Gold Association, first examined by China Daily, said gold consumption in China reached 523.54 metric tons in 1H19, down 3.27% YoY, due mostly to offlining of production facilities, the demise of zombie company producers, and readjusting the industrial structure to a period of lower demand.
Gold bar consumption declined 17.29% YoY to 110.51 tons in 1H19, while gold coins plunged 29.27% YoY to 2.9 tons. Gold for industrial purposes fell 0.6% YoY in 1H to 51.36 tons, the report said, outlining how some of gold's lackluster demand in 2019 is the result of soaring spot prices.
China - Gold - Output - Industry - Production
"China's total gold output decreased as the industry is upgrading the production techniques and cleaning up some mining rights issues," said Zhu Yi, senior analyst of metals and mining at Bloomberg Intelligence.
Demand for domestic gold jewelry bucked the trend, came in at 358.77 tons in 1H19, up 1.97% YoY.
China - Demand - Jewelry - Consumers - Needs
"China's increasing demand for gold jewelry is due to consumers' rising needs and falling demand for gold bars and coins due to the decreasing investment needs."
The association said, "domestic companies in the gold sector have been pushing forward high-quality development, to close down outdated production facilities, optimize the industrial structure, integrate high-quality gold resources, against a background of global macroeconomic weakness and domestic economic restructuring."
China - National - Gold - Group - Gold
China National Gold Group, a state-owned gold corporation, has "rooted out" 31 zombie company producers that rely on government bailouts to survive.
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