Gold producers in the Chinese mainland reported a growth of more than one-third in profits in the first three quarters of this year, as a result of robust output and bullish prices of the precious metal, according to an industry organization.
Profits of around 300 gold producers under statistics of the China Gold Association totaled 2.03 billion yuan (US$245.17 million) during the period, jumping by 35.3 percent from a year earlier.
Their output value grew by 14.18 percent year-on-year to 22.81 billion yuan (US$2.75 billion) during the period.
Gold output amounted to 148.66 tons from January to September this year, an increase of 9.74 tons, or 7.01 percent, from the same period last year, statistics showed.
Output in September alone stood at 18.89 tons, up from 18.47 tons in August.
This is the third consecutive month-to-month increase since July.
"Domestic manufacturers have been speeding up gold production to earn more profits, driven by high gold prices," said Lu Wenyuan, secretary general of the gold association.
Lu predicted total gold output in the mainland would reach a record high of 210 tons this year, up from 200.598 tons last year.
The mainland now ranks No 4 in both gold output and demand in the world.
Gold demand in the mainland amounted to 112.5 tons during the first half of this year, up from 97 tons a year ago, according to the World Gold Council.
Roland Wang, the Beijing-based manager of the gold council, said the council will release figures on the third-quarter gold demand in the mainland next week.
Total gold demand in the mainland is expected to rise to 220 tons this year from 207.6 tons last year, Wang said.
The gold council predicted in September that the mainland's gold demand would reach 600 tons annually in coming years with the ongoing gold market deregulation to allow individuals to buy gold bullions for investment, and China's steady economic growth.
Jewellery now accounts for more than 90 percent of total gold demand in the mainland.
Demand for gold jewellery reached 109 tons in the mainland during the first half of this year.
The mainland is opening the gold investment business to individuals step by step.
The mainland's big four State-owned commercial banks - the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China and the China Construction Bank - are expected to receive approval from the central government to open the business later this year or next year, according to industry sources.
Analysts say domestic gold prices will continue to fluctuate at relatively high levels in line with changes in the international market because of a slew of factors, such as the weak US dollar, lofty oil prices and fears of terrorism.
Price of the Au99.99 gold bullion at the Shanghai Gold Exchange, representing the benchmark in the mainland gold market, closed at 113.95 yuan (US$13.76) per gram yesterday, up from 112.25 yuan (US$13.56) on Wednesday.
The world's gold prices now hover around US$426 per ounce, up from US$400 in early August.
Trading volume at the Shanghai Gold Exchange amounted to 46.3 tons in the first nine months of the year, up 61.78 percent from a year earlier.
The trade value surged by 73.12 percent year-on-year to 49.69 billion yuan (US$6.00 billion) during the period.
The exchange, launched in late 2002, now has 108 members including commercial banks and gold producers and processors which conduct spot transactions using renminbi.
Previously, Chinese gold producers had to sell all of their gold to the People's Bank of China, the central bank, under the central government's tight control on the domestic gold market.
The central bank was responsible for allocating gold to users of the metal.
(China Daily November 5, 2004)
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