Chinese Demand for Silver Bullion Bars Halved in 2014

Silver bars weren’t very popular last year — especially in China, where demand fell by half.

Chinese demand for silver bullion bars dropped 52% in 2014 from a year earlier, to 6.2 million ounces, according to the The Silver Institute’s annual World Silver Survey, which was produced by the GFMS team at Thomson Reuters. That was the lowest level since 2010.

“The sharp decline was attributed to the continual implementation of the anticorruption policy, which served a severe blow to the gifting sector, including bars,” according to the survey, which was released Wednesday.

A steep drop in silver prices certainly didn’t help. Silver futures SIN5, +0.79% on Comex fell nearly 20% last year, following a 36% plunge in 2013.

Total global demand for silver bullion bars fell 31% last year to 88.4 million ounces — in value, that’s about a $1.7 billion drop, the survey said.

Andrew Leyland, manager for precious metals demand at Thomson Reuters GFMS, told MarketWatch in an interview that he was surprised to see how weak demand from China actually was.

The government crackdown in gifting and its anticorruption campaign, along with a “softening of economic sentiment through the course of 2014,” impacted bar buying in China, he said. “A lot of luxury goods sectors didn’t have a particularly good year.”

Globally, investment in silver coins and bars fell by 20% last year to 196 million ounces, the survey said.

There was a slowdown in European buying of silver bars and coins, primarily due to an increase in sales tax in Germany that was applied to silver from the beginning of 2014, Leyland said.

He pointed out, however, that the market was coming from a record base year in 2013. Last year’s bar and coin investment figure was still the second highest on record.

And though the world’s silver mine production was up a 12th straight year in 2014 and supplies of the metal were at their highest in about 4 years, the market still saw a supply deficit of 4.9 million ounces last year.

Looking ahead, Leyland expects silver-mine supply to decline and is looking for growth in a number of demand sectors. He forecast an average silver price of $16.50 an ounce for this year.

Prices will see some short-term weakness, but are likely to end the year at more than $17 an ounce, with a couple of years of modest price increases to follow, he said.

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Celebrating 40 Years of China and Australia Friendship Silver Coin

The Perth Mint of Australia is celebrating four decades of a flourishing relationship between two countries with the release of a new silver coin. The 2012 China and Australia 40 Years of Friendship Silver Coin is available now from the Perth and honors the relationship with a reverse design depicting two creatures from the affiliated countries.

2012 is the 40th anniversary of formal diplomatic relations between the country of China and the country of Australia. Official ties were formed on December 21, 1972 and have grown to become a strong bond fostered through commerce, travel, education and political channels. The interweaving of the two cultures has led to a greater understanding of both. In addition, it has also resulted in many Australian-born Chinese and Chinese-born Australians further solidifying the ties between the two countries.

Coin Designs and Specifications

Shown on the reverse is a kangaroo representing Australia and a giant panda representing China. The two animals are poised as if in recognition of one another. Both are considered iconic animals for their countries and their use on a single coin further exemplifies the relationship between China and Australia.

Shown above the animals are the colorized flags of Australia and China. Reverse inscriptions include "CHINA AND AUSTRALIA 40 YEARS" in both English and in Chinese. Also shown are the years of the lasting friendship of the two countries, "1972-2012." Additionally, the reverse contains the Perth Mint’s historic ‘P’ mintmark.

The obverse depicts Ian Rank-Broadley’s effigy of Her Majesty Queen Elizabeth II. The portrait is surrounded by the inscriptions of "ELIZABETH II," "AUSTRALIA," "2012," "1 DOLLAR" and "1 oz 999 SILVER."

The coin is composed of one ounce of 99.9% pure silver. It is struck as legal tender of Australia under the Australian Currency Act of 1965 and features a face value of AUS $1.

China and Australia Friendship Silver Coin Specifications

Silver Content (Troy oz)	1
Face Value (AUS)	$1
Fineness (% purity)	99.9
Minimum Gross Weight (g)	31.135
Maximum Diameter (mm)	40.60
Maximum Thickness (mm)	4.00

Each 40 Years of Friendship Silver Coin is presented in a black display case. Included along with the coin and case is a numbered certificate of authenticity that indicates the limited mintage of 5,000 coins. The coin ships inside an illustrated shipper which showcases pictures of a kangaroo and a giant panda.