China Boosts Gold Reserves: Central Banks and Metals Market Updates
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Metals: China continues to boost gold reserves
The latest data from the People’s Bank of China (PBoC) shows that China increased its gold reserves for a seventh straight month amid ongoing strong demand for safe assets. The nation raised its gold reserves by about 0.5mOz to a total of 67.27mOz at the end of May 2023.
China has added over 2.6mOz of gold to its reserves since the start of the year and nearly 4.6mOz since restarting gold purchases in November 2022. A recent survey by World Gold Council (WGC) conducted in May shows that about a quarter of central banks plan to increase their gold holdings over the next 12 months as the future role of the US dollar comes into question.
Meanwhile, a recent survey from Shanghai Metals Market shows that China’s primary aluminium output rose to 3.47mt in May as some smelters in Guizhou province restarted operations. The group further believes the nation’s aluminium output could rise in June, as smelters in Yunnan province are expected to restart operations on increased power supplies. Among other metals, refined nickel output rose 30.3% YoY (+5.7% MoM) to 18.6kt last month as producers ramped up production levels.
Agriculture: Ukraine grain shipments decline
The latest data from Ukraine’s Agriculture Ministry shows that domestic grain exports so far in the 2022/23 season stood at 46mt, a marginal decline of 3% YoY. The above includes wheat exports of 15.7mt, down 15.7% YoY and corn exports at 27.3mt, up 21% YoY. The fall in exports is in line with the series of obstacles faced by Ukrainian shipments in recent months.
Recent data from Brazil’s Trade Ministry shows that Brazil’s soybean exports rose 46.5% YoY to 15.6mt in May, while cumulative shipments increased by 14% YoY to 49mt in the first five months of the year. Shipments to China jumped 60% YoY to 10.3mt in May 2023 whilst exports to Argentina reached a record high of 979kt. In contrast, corn exports fell 64.6% YoY to 385kt in May. However, year-to-date shipments expanded from 5.3mt to 10.64mt in Jan’23-May’23.
