Steel industry facing the gallows, after the recent steel price increases in South Africa the storm continues to batter the already struggling sector, as of 25 August Arcelormittal South Africa declared FORCE MAJEURE at its Newcastle furnace when a blast occurred on the 20th of August, this has resulted in a halt in production and now the steel giants are battling to meet demands, on the back of this their Vanderbijlpark mill is not producing at 100% due to COVID restrictions and there is now concern that the country could soon run out of steel whilst the smaller mills try to accommodate this problem there is an impending steel increase coming first of next month in the region of R1000/Ton.
To add insult to injury on the 13th of August Eskom announced that stage 2 load shedding would come into effect for a short period of time however since then the country has been on an almost constant load shedding schedule and as of this week stage 4 has been introduced which is wrecking further havoc across all industries within the country.
Border updates, operating times at Beitbridge on the Zimbabwean side are still at a 50% capacity and anyone entering any offices at the border are to produce a valid negative COVID-19 test whilst at Groblersbrug and other borders around Botswana, anyone entering into the country is to undergo a COVID test, testing stations have now been setup at the borders with a 24-48 hour turnaround time.
The Trans-Kalahari Corridor Secretariat (TKCS) has announced that it will hold a “Virtual Stakeholder Engagement” this coming Friday in a bid to address the “devastating consequences on the national and regional economies of the Covid-19 pandemic”.
According to the TKCS, the competitive advantage of the region has been seriously compromised, with exports and imports having been seriously affected.
The Secretariat supports its view by quoting from the World Bank’s biannual Pulse Report which states that as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020.
Going north, last week, notice came out that anyone crossing into Zambia from the Chirundu border is to produce a valid COVID test from the country they are entering from, this was supposed to go live on the 2nd of September, however after much confusion and debate it seems to have been called off for now.
Also last week the notoriously problematic border crossing of Kasumbalesa between Zambia’s Copperbelt Province and the province of Haut-Katanga in the south-western Democratic Republic of the Congo was shut down again.
This was reported by Transit Assistance Bureau “Transist”.
A message sent to Transist said: “Demonstrations at Kasumbalesa so no movement of trucks.”
It’s not clear what has sparked the demonstrations but the area has been politically volatile for some time, with violent flare-ups experienced all the way north-east of Kasumbalesa into copper mining areas around Lubumbashi and Kolwezi.
Earlier last month Kasumbalesa was turned into a flashpoint after members of the Union for Democracy and Social Progress (UDSP) went on the rampage following the alleged killing of a colleague.
It is not known whether the UDSP is also responsible for last weeks’ closure.
Airfreight slowly taking off, the easing of the lockdown has gradually seen an increase in the airfreight sector, initially it was seen that the air cargo sector had not returned to levels pre-dating the Covid-19 pandemic, despite the relaxation of lockdown regulations across the globe.
And yet yields dropped by a global average of no more than 2.4% from the last week of June through the first weeks of July (from Asia Pacific and Middle East South Asia by 4% and 3% respectively, World Air Cargo Data (ACD) has found.
However, in its most recent market data assessment the airfreight aggregator also found that weekly volumes were lower by mid-July than two weeks before.
The gradual route to recovery to pre-Covid market conditions continued for the global air cargo industry in August for a fourth-consecutive month, according to fresh volume and yield data from industry analysts CLIVE Data Services and TAC
Zimplats doing well, Platinum giants Zimplats have recorded a net profit of US$261.8 million for the financial year ended June 30 2020, which is an increase of 81% compared to the same period previous year.
The profitability was on the back of an increase in mineral prices, particularly rhodium, palladium, gold and nickel that saw revenues going up from US$631 million to US$868.9 million.
“The groups operations were not affected by the COVID-19 pandemic as all the mines and processing plants continued operating throughout the year with no confirmed cases within the workforce” the company said.
The miner opted not to declare dividend for the period to preserve cash and maintain liquidity in light of the economic uncertainties posed by the COVID-19 pandemic.
Following on from Zimplats’ current success, another major talking point is the revival at Rio Zim, Zimbabwe’s second largest diamond miner, after having to halt their sales in March and the diamond industry coming to a stop over the past 6 months due to COVID-19, the mine has seen a turnaround, after deciding to cut the price of diamonds last week an immediate bounce back can be seen and the demand for the precious gems has come back with a vengeance.
It seems that Zimbabwe as a whole possesses great resilience and bullish like behaviour when things get tough and hopefully this is the beginning of the revitalisation of the great country once known as the “bread-basket” of Africa.
Implats posts record earnings, revenue was 44% higher at R69.9-billion on higher dollar metal prices and a weaker rand, partially offset by lower PGM sales volumes. The higher revenue resulted in the group generating a gross profit of R23.3-billion for the year, a 240% increase on the R6.8-billion of its 2019 financial year.
Future uncertain, the future of Mopani mine in Zambia remains uncertain as majority stake holder, Glencore, who owns 78% of the mine has put the sale of Mopani Copper Mine on the table, after placing the mine into care and maintenance in April earlier this year.
Stay tuned …
“We Generate Fears While We Sit. We Overcome Them By Action”