The Shanghai Gold Exchange deliveries dilemma

We were hoping for some clarification on the latest reporting of Shanghai Gold Exchange(SGE) gold deliveries in today’s SGE gold data report for week 2 given the seemingly massive figures being reported so far this year and this has not been forthcoming.  The announced figures so far this year are so far in advance of anything we have seen beforehand that the natural conclusion is that the goalposts have been moved and this year’s figures can not be compared with last year’s.

For example, the average weekly withdrawals figure from the exchange – the literal translation of the category headline as reported by the SGE is ‘deliveries’  – was around 50 tonnes in 2015.  So far this year the reports out of the SGE for weeks 1 and 2, using exactly the same heading in the released table – 本周交割量 – as for last year’s released tables of deliveries, have been 238.2 tonnes in week 1 and 247.2 tonnes in week 2 giving an apparent  total for the year to date of 485.5 tonnes.  (However there has presumably been a small unannounced adjustment for week 1 as the cumulative total (累计交割量 )  reported by the SGE with the week 2 figures was actually 491.2 tonnes.)  These are so much larger than last year’s figures that we are now pretty certain that although the descriptive headline in the tabulated announcement is exactly the same as for last year, the new figures relate to a different statistical make-up.

Koos Jansen, as always, writing on http://www.bullionstar.com , has come up with an explanation for the huge differences between this year’s and last year’s statistics .  He draws our attention to an announcement by the SGE dated January 16th (in English) which states:

With a view to distributing market data regarding physical deliveries in a more comprehensively way and helping market participants interpret delivery-related data and reports more accurately, the Shanghai Gold Exchange (the “Exchange”) has adjusted some terms in the Delivery Reports which are included in Market Data Weekly Reports and Market Data Monthly Reports. The adjustments shall be effective as of Jan. 1st 2016 and are clarified as follows:

        1.The term “delivery amount” refers to the sum of the trading volume of physical products and the contract delivery volume of deferred products. The term “delivery ratio” refers to the proportion of delivery amount to the total trading volume of both physical and deferred contracts.

        2.The term “load-out volume” refers to the total volume of standard physical bullions withdrawn from SGE-certified vaults by members and customers.

        3.The terms “accumulative delivery amount”, “accumulative trading volume” and “accumulative load-out volume” respectively refer to the sum of delivery amount, trading volume and load-out volume from the beginning of the year to the statistical time point. The term “accumulative delivery ratio” refers to the proportion of accumulative delivery amount to the accumulative trading volume.

        4.Delivery-related data of silver products are added into the reports.

To an extent, this only serves to confuse.  According to Jansen – perhaps the foremost expert on things SGE – the old reported withdrawals figure to compare like-with-like would be the “load-out volumenoted as item 2. in the SGE announcement.  Unfortunately this is not one of the figures released by the SGE in its new weekly statistical presentations.

So, for the moment, all that we can glean from the SGE figures is that total volume through the Exchange remains very high and those for week 2 were a little higher than for week 1, but the amounts which relate to the old SGE withdrawals figure would seem to remain obscured within the new, supposedly improved, SGE data announcements.

For Koos Jansen’s full explanation of how he sees the latest SGE presentation of its statistics click on: Are SGE Withdrawals Gone?

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