China copper smelters plan to cut output after margins fall
The output cuts underscore the industry’s struggle with a shortage of feedstocks caused by recent mine production setbacks.
Governments hate competition. Due to record breaking gold prices this year, more unauthorized gold exchanges have been created to capitalize on gold fever. However, China regulators are not happy about the competition.
A joint statement issued by People’s Bank of China, the Ministry of Public Security and other regulators recently announced, “No local authority, institution or individual is allowed to set up gold exchanges.” In essence, gold exchanges in China, except for two in Shanghai are to be banned. The joint statement also explained that the Shanghai Gold Exchange and the Shanghai Futures Exchange are sufficient enough to meet domestic investor demand for spot gold and futures trading.
Reuters explains, “The PBOC cited lax management, irregular activities and evidence of illegality which were causing risks to emerge, as the reasons for taking the decision. The central bank said it would lead a team to clear up the mess — gold exchanges will be altered or closed, banks will stop providing clearing services to them; and some people will be put under police investigation.”
The move serves as a reminder to precious metal investors that gold and silver remain to be a focus in a world of fiat currencies. In addition to tighter gold exchange oversight, China is making agreements to distance itself from the U.S. dollar. Earlier this week, Bloomberg reported, “Japan and China will promote direct trading of yen and yuan without using dollars and will encourage the development of a market for the exchange, to cut costs for companies, the Japanese government said. Japan will also apply to buy Chinese bonds next year, the Japanese government said in a statement.”
If you would like to receive more professional analysis on equity miners and other precious metal investments, we invite you to try our premium service free for 14 days.
To contact the reporter on this story: Eric McWhinnie at [email protected]
To contact the editor responsible for this story: Damien Hoffman at [email protected]
Comments
Rsreapirs
Japan had better watch it. Remember the Rape of Nanking? The Chinese do!