(Adds details, background)
SHANGHAI, July 24 China's gold demand slumped
19.4 percent in the first six months of 2014 from year ago, the
China Gold Association said in a statement on Thursday, but
production rose strongly in the same period as miners ramped up
output to protect profit margins.
Gold demand from China, the world's largest consumer, has
slackened this year as a 28 percent tumble in 2013 prices, which
was the first annual decline in 13 years, dented consumer
confidence in the metal as an investment tool.
Lower demand this year is also partly due to huge purchases
last year. The drop in prices prompted many to bring forward
their purchases, eating into 2014 demand.
Gold demand from January to June stood at 569.45 tonnes,
compared with 706.36 tonnes in the same period last year, the
association said in a statement on its website. Total output in
the first six months of 2014 reached 211.1 tonnes, up 9.47
percent from a year ago.
In a sign that Chinese consumers were seeking other
investments as an inflation hedge, sales of gold bars and coins
fell 62.1 percent and 44.3 percent respectively.
Jewellery sales in the first half rose 11 percent from a
year ago to 426.17 tonnes, while industrial consumption rose
While global gold prices have climbed nearly 8
percent this year on the back of geopolitical risks in Ukraine
and the Middle East, Chinese miners remain under pressure to
protect their profit margins as costs increase.
While China is considered a low-cost producer compared with
its global peers, costs have steadily risen on the back of
higher wages, increased environmental requirements and tougher
To cope with weaker bullion prices, some large miners such
as China Gold International Resources Corp Ltd, have
ramped up output as a way to reduce per-unit production costs.
Zijin Mining Group Co Ltd 2899.HK 601899.SS, China's largest
listed gold producer, said it partly offset falling product
margins by bolstering sales.
China's gold imports from Hong Kong dropped to a 16-month
low in May, bringing total imports in the first five months of
2014 to 406.833 tonnes, down 1.58 percent from the same period
last year, according to most recent data from Hong Kong Census
and Statistics Department.
(Reporting by Fayen Wong; additional reporting by
A.Ananthalakshmi in SINGAPORE; Editing by Paul Tait and Michael