Chinese Silver Exports To Drop 40%

Tyler Durden's picture

After outperforming pretty much every asset class, most certainly stocks, and even gold, year to date, the "poor man's gold" may surge even more. The reason: China may cut silver exports by as much as 40%. As Bloomberg reports: "Shipments may decline from about 3,500 metric tons in 2009, said Feng
Juncong, chief analyst at the state-owned Antaike, without providing a
specific forecast. Customs data show exports plunged almost 60 percent
to 970 tons in the first eight months. Cancellation of an export rebate
in 2008 is also hurting shipments, she said." This is in line with recent expectations from the World Gold Council which has previously stated that China will likely become an increasingly greater buyer of gold both institutionally and at the retail level. And while we have discussed the impact that China's (temporary) ban on exports of rare earth minerals will have on prices (hint: not down), this will also end up driving silver prices higher. The catalyst, as usual, inflation: "There are Chinese investors now hoarding silver, along with other
resources, amid anticipation of higher inflation.
China is
short of resources so these investors believe the metals will be more
valuable in the future." These investors are correct.

More from Bloomberg:

Reduced exports may bolster prices that are trading near a 30-year high on speculation that governments worldwide will take further steps to stimulate their economies, weakening currencies and increasing demand for assets that are a store of value. China, the third-largest producer after Peru and Mexico, revoked export rebates in August 2008 to curb use of natural resources.

“There is huge demand in China this year and that has affected exports, which were already hurt after the tax rebate was abolished,” said Ng Cheng Thye, head of bullion at Standard Bank Asia. “The demand is coming from all areas, including jewelry, investment and fabrication and this has resulted in a physical market shortage in the Far East.”

“China may sharply reduce its silver exports this year following the scrapping of the rebate and as domestic demand picked up amid expectations for higher inflation,” Feng said. This year’s 5,100-ton quota is unlikely to be fully used, she said.

China’s silver production, including mined, by-product output and recycled material, grew by an average 14.9 percent every year in the 20 years since 1990 to 10,348 tons in 2009, Feng said. Growth was mainly because of the fast-growing production of lead, zinc and copper, which generates silver as a by-product, Feng said.

The country’s silver output dropped 1.9 percent in the first eight months to 7,445 tons, she said. About 60 percent of China’s silver mined output is in the form of by-product of base metals, according to Antaike estimates.

The one natural better seller in the silver axe has long been JPM. The question of how the bank will cope with an increasing demand of investors for physical, as well as overall rising prices and creeping margin calls to its trading desk so far remains unclear. We were not surprised that none of the analysts on the conference call asked the question: after all, they are all in the same boat. It is also not surprising that there is an increased selling pressure on gold today, which even with the DXY and stocks reclaiming yesterday prices, remains at largely depressed levels. Some more skeptical observers believe the whole action over the past two days was merely enacted to break the very tight (and higher beta) correlation that PMs had exhibited vis-a-vis risk assets. So far, it is succeeding.

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Turd Ferguson's picture

Blythe Masters yawns.

Mr Lennon Hendrix's picture

What she can't find her derivative dildo in China?

Turd Ferguson's picture

She's worn out from the gang-bang she's been taking from Timmuh and Bennah.

dlmaniac's picture

LOL, 40% more squeeze on Master's naked @$$.

Too bad China is not cutting it off to 100% like they've been doing to gold export. Let's hope it comes the next.

66Sexy's picture

true patriots support china's economic policies..


sounds like a contradiction... but its true.

minus dog's picture

Not surprising, though.  The Chinese have a much better (and recent) understanding of general economic clusterfuckery than we do on this side of the big pond.  Go park at a strip mall and watch people, then go ahead and try to tell me with a straight face that they get it.  Sad.

A Nanny Moose's picture

Strip mall in the US?

I was at the local Target on Saturday, and it was packed. Like Dec 24th packed. Perhaps they do get it? Living mortgage free on their 99 weeks, what else is there to do but max out the credit cards those evil banks twisted their arms to take?

truont's picture

Masters:  "What, me worry?"

"I'm TBTF!"

Turd Ferguson's picture

I must admit that I'm quite impressed that she's been able to keep gold below 1346 all day. She really scared the shit out of a lot of longs yesterday.

geminiRX's picture

Anyone trading gold for the last 10 years or more is NOT scared about 2-3% corrections. It is normal aspect of trading in this sector.

Turd Ferguson's picture

Yes and most of the newer longs are late to the party and have not been trading gold for the last 10 years.

geminiRX's picture

Gold has a very long run still ahead. In fact, the party hasn't even started yet. Not too late to buy a kazoo and party hat.

JuicyTheAnimal's picture

To me yesterday was an obvious failed manipulation.  Silver $25 by end of October now that this is out of the way.

Mr Lennon Hendrix's picture

Exactly.  The "elite" call themselves such for a reason:  Their mindset has them at the top of the world.  Unfortunately, they would not be there if we did not recognize them as such.  Fortunately, it is at the top of one's game when they are most vulnerable.  That is why we take them down now.  They are at their most vulnerable.

trav7777's picture

Export Land Model, bitchez

spartan117's picture

Maybe the US should place tarriffs on China's REE and Silver exports?

Bartanist's picture

hmmm ... slapping massive tarriffs on iPODs would cause the Chinese to oppress their workers further to keep labor costs low and resulting in civil unrest in China...

That will teach them.

... or so says the happy world of unintended consequences.

Bam_Man's picture

Mercantilist export model economy =

Perpetually undervalued currency =

chronic inflation =

strong public demand for precious metals.

Which part of this is difficult to understand?

And how many potential PM buyers are there in China?

Saxxon's picture

"And how many potential PM buyers are there in China?"

This is a very interesting question to me.  In terms of coinage, Chinese Silver Pandas been carrying a hefty premium across-the-board (dates and types).  We know there is a LOT of hot new money in the PRC and significant inflation.  My wife is from Beijing, her parents live there and they wholeheartedly confirm the latter.

Next time over, I am going to bring a dozen pristine Silver American Eagles for gifts.  The Chinese as collectors are notorious for their Sino-centric buying habits; but if their beloved, rather mawkish Panda coins can't be had, what else will they move to?

midtowng's picture

Apply that statement to all of east Asia.

f16hoser's picture

China has all the bullets now. JPM just crapped their pants! Smell that? Smells like banker feces......

cossack55's picture


"I love the smell of silver in the morning, smells like....Victory"


pmn's picture

Which means, of course , that they're about to sell a shit load more of unbacked paper, in a vain attempt to stem the tide just

f16hoser's picture

Good! I've got all the time in the world. Buying Silver for my kids. These are buying opportunities. Physical supply is drying-up and JPM knows it. I just hope we don't have to bail them out again....Fucking politicians

Mr Lennon Hendrix's picture

China knows what is at stake here.  In time, paper has covered everything, and when it rains on this paper world, the facade will turn to mush.  Inside it is only a group of dummies; one of a bald man with a printing press.  The actual luminaries are long gone, and there conscious with them; they dream of drinking margaritas at sunrise while lecturing Congress about the rules that have been lined up ages ago by their patriarch banksters.  China knows when it rains it pours.

As gold is on the backside of production and has been since 2000 at the earliest, and platinum production peaked last year, I have been waiting on silver.  Wouldn't it be ironic if silver and oil production peaked at the same time (with gold and platinum only a decade earlier)?  Call this event peak everything, and then you will know why the banksters papered the town in emerald green and fled.

medicalstudent's picture

reckless silver consumption left run rampant


silvereconomics youtube says many grams are used for a 32" plasma, any idea of truth here?



sumo's picture

There is a growing consumption of Silver in solder used in electrical/electronic products. The lead in traditional tin-lead solder prevents the growth of metallic "whiskers" that, gradually, cause short-circuits.

But the use of lead in solder contravene's Europe's RoHS program. So silver is being used instead:


TheGoodDoctor's picture

Interesting note on the RoHS. Learn something new everyday!

Kaiser Sousa's picture

Tyler -

sent u this via email...i think it is worth investigating...

a retired CFTC judge confesses....


Pladizow's picture

Dictators do what they want!

Horatio Beanblower's picture

Why did the old bastard take so long to develop a conscience?

JonNadler's picture

that old fool, he personally assured me he wouldn't say anything. What's the world coming to? Can't you commit fraud and keep it a secrete anymore?

Clark_Griswold Hedge Mnger's picture

Ah the "Head Up Your Ass" Coin"... how fabulous, though I doubt it is being minted in limited quantities though..... Very Nice

DosZap's picture

The Rectal Defilade "PROOF" was supposed to be a JPM Special Only Edition.

A Nanny Moose's picture

I so want that coin to be real! At least put that graphic on a coffee mug!

Oh regional Indian's picture

Sun Down... Moon Rise... 

The moon shines in the dark, remember?

These are dark times....


sbenard's picture

I'm amazed silver is up so modestly on this news!

pmn's picture

commercial sell orders slung at the market today and yesterday.

apberusdisvet's picture

Good link, but don't expect anything to happen.  The DOj has been sitting on several well documented manipulation complaints for over a year.  Andrew Maguire is out of harm's way now working for Sprott.  The last manipulation of $1+ over the last few days will be repeated until the election; after that who knows?  I'm still buying on the dips; $10k in bullion @ 23.60; another $8k @ 23.39.  I strongly believe silver will hit $28 Q1,2011.  Please note that GSR has dropped from 65 to 58 in two months.

pmn's picture

surprisingly, or not, I have the same price target for b4 the end of oct.

Max Hunter's picture

I have the same target to be reached within 3 trading days of next Fed meeting.. :)

Kaiser Sousa's picture

apberusdisvet -

i dont expect anything from government...each branch and regulatory agency is controlled completely by the bankers...continued physical demand and the lunacy of the Crminal Reserve will propel both forms of real money to their true valuations and rightful roles n monetary affairs...

snowball777's picture

Yin Chongzi, Muquans!

Caviar Emptor's picture

This is all part of the bigger picture: Resource Wars. 

That will be the story of the 2010s going forward. Everything is in play now: Agriculture, Fertilizer, Fossil fuels, Water, Arable land, Industrial metals and Precious Metals. 

Precious metals hold a key niche because they're convertible. Into anything: local money, foreign currency, commodities, real estate, guns, labor, government officials etc....And they're a hedge against government screwing up the currency or the economy or both.

In the 2010s, He Who Is Without Gold (or other PMs) Better Own A Shovel.

DosZap's picture


And when we had real wealth, why did we not go on a Global buying spree?.

Esp for Oil rights, we knew we had to have it.

We still have a 100yr supply we know about here, but the Enviro Nazis have stopped the removal and/or drilling just for back up reserves.

It's a very smart move to pay more, and use up other folks energy sources, and whatever else thats not replaceable.

Why do we bitch about Oil, when we can convert light vehicles, trucks,cars, etc, to LPG and cut our crude needs by 50%?.

We have MORE known reserves of it, that the entire Middle East.

Lionhead's picture

Administrative Federal Law Judge Painter resigns from overseeing the CFTC after exposing his fellow Judge Levine:

Now, we should see Bart Chilton step up his activities against the paper gold & silver scams.