Chinese silver net import dropped sharply 67% to 232 tons in November

Chinese Silver net import dropped sharply 67% to 232 tons in November last year, showed the latest Chinese trade statistics. November exports were the highest recorded in 12 months.

At 232 tons, imports were down 71% YoY, their lowest level since January 2009. The Dragon nation imported 78.03 million ounces in the first 11 months of 2011, down from 115.53 million in 2010.

By far, the bulk of Chinese silver demand is industrial rather than investor-based and Chinese demand for small bars and coins is small market at 3.7 million ounces in 2010, with Chinese investors preferring to play the paper silver market since physical imports attract a hefty value-added-tax charge, unlike gold.

As for industrial demand, electrical and electronics (where China is the third-largest market) along with brazing alloys and solders (China is the biggest consumer) are the largest categories of Silver users.

As such, the steep contraction in November’s net silver imports points to a marked slowdown in industrial-related demand.

A longer term perspective is as ever important as are the net figures. In 2005, China was a net exporter of nearly 3,000 tonnes of silver. In 2010, China imported more than 3,500 tonnes of silver.

Incredibly, Chinese net imports of silver surged four fold in just one year from 2009 to 2010. Demand for silver in China has risen sharply in recent months and years.

Growing middle classes and savers in China, India and other Asian countries have been turning to “poor man’s gold” and using silver as a store of value.

Gold has risen above its historical nominal high in local currency terms internationally and silver is seen by many as a cheaper alternative. – COmmodityOnline

Tags: China silver imports

Posted by Silver Guru on Jan 19 2012. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry