SINGAPORE (REUTERS) - Precious metals storage firm Malca-Amit has opened a facility in the new Shanghai free trade zone that can store up to 2,000 tonnes of gold as it hopes to benefit from continued strength in China's demand for bullion.
Weak global gold prices, which are headed for their first annual drop in 13 years, have spurred record imports by China, putting the country firmly on track to overtake India as the world's top consumer of the precious metal this year.
The facility by Malca-Amit, the firm's largest so far, will make it easier for banks to store and trade gold within China.
"We are negotiating with financial institutions for leasing out a few dedicated units," Mr Joshua Rotbart, general manager at Malca-Amit's precious metals business, told Reuters.
"We will see substantial holdings there within a year from now," he said from Hong Kong on Monday, adding that the facility, which opened last week, does not store any gold yet. The facility would be open to foreign and Chinese banks, he added.
Demand in China is set to exceed 1,000 tonnes this year, according to the World Gold Council.
China's net gold imports from Hong Kong have totalled about 855 tonnes for the first nine months of the year. India's total imports for the same period stand at about 600 tonnes.
As China does not publish any gold trade data, the numbers from Hong Kong - a main conduit for gold into China - give the best picture of the country's trade of the precious metal.
Hong Kong-based Malca-Amit, which provides logistics and storage facilities for precious metals, diamonds, fine arts and other luxury items, already has gold vaults in Hong Kong and Singapore that can hold 1,000 tonnes each.