Silver Imports to India Jump, China Falling
Friday, 8/23/2013 13:07
India switching from gold to silver imports, but China's stockpile still weighs...
SILVER BULLION shipments into India are surging in 2013 but the metal is finding much lower demand in China.
India's silver imports during the last five months have exceeded all of 2012, according to investment analysts, growing by 258% between April and July alone compared to the same period last year.
In China, however, year-to-date figures show silver imports lagging 2012 by nearly 40% according to recent analysis by bullion dealers Standard Bank.
"Above-ground inventory in China," they wrote at the end of July, "which has been the growing source of demand for the metal since 2009 – is currently as high as 18 months of fabrication."
Since that comment, new data released this week showed July's silver bullion imports to China falling a further 22%.
Faced with increasingly expensive gold import duties, Indian households – the world's largest gold buyers – have increasingly switched to
buy silver instead, whether for jewelry, investment and festival gifts.
"The hitherto relatively more favourable tax regime for silver has encouraged a shift towards the white metal by consumers," writes Jonathan Butler at Japanese conglomerate Mitsubishi Corp.
"[That] may well reverse now that the [silver and gold import] tax regimes have aligned. However, demand for silver in jewellery as well as coins and bars is likely to remain strong."
New Delhi last week raised both silver bullion and gold import duties to 10%, but retained stricter financing rules for gold importers than silver, barring all gold coin and medallion shipments.
Official data show India importing 857 tonnes of silver between April and July. That compares with some 2,000 tonnes of silver imports to China in full-year 2012.
"Silver, unlike gold, is very erratically imported [into India]," says logistics executive Samir Mankad of Gujarat State Cargo Exports Ltd. "There have been periods when silver imports have been zero."
With legal gold imports cut to zero over the last month by the
Indian government's aggressive anti-gold moves, "Silver imports are [now] high due to physical inventory available to store silver," he adds.
Globally, "We maintain that silver's underlying demand/supply fundamentals remain weak," say Standard Bank's analysts, "and that inventory is abundant."
Speaking to specialist metals site MineWeb a fortnight ago, "Demand for silver for solar panels has been very weak compared to the 2009-2011 period," chief analyst Walter de Wet said.
"We don't think it's going to be enough to offset the supply glut that we are sitting with, and especially in China."
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