Trade Winds bimonthly update volume 15
Tensions flare at Beitbridge, following weeks of up and down madness at the Beitbridge Border Post drivers have finally said enough is enough! Over the past week, the queue going north at Beitbridge has grown, with reports emerging of corrupt police officials soliciting R500-R1000 bribes but the drivers are now pushing back.
From early morning on Tuesday this week, video footage emerged of truckers blocking the path of another truck being escorted by police to the front of the queue, the drivers confronted the official insisting the truck return to the back of the queue. This is not an isolated incident.
The queue is currently sitting around the 16km mark in advance of the potential shutdown.
Maersk resumes operations at CT Northbound, Strategies to reduce the backlog at the Port of Cape Town are bearing fruit, with Maersk announcing that it will resume calls at the port on the northbound rotation of the South Africa Europe Container Service (Saecs).
Due to prolonged delays at the port caused by Covid-19 staff shortages, Maersk announced in June that it had decided to bypass Cape Town on the Saecs rotation between Durban and the Port of Algericas (WAF1).
However, in a customer advisory notice released yesterday, Maersk said: “Waiting time in Cape Town terminal has decreased significantly which has allowed us to review our Saecs product.”
“We are pleased to inform you that we will revert back to Cape Town with our Saecs northbound call and resume WAF1 in Port Elizabeth to cover the Eastern Cape market to Europe.”
The shipping line will however continue to bypass the Cape Town southbound and there will be no change to import routings to Port Elizabeth and Durban.
Slump in production, Anglo America’s platinum production slumped by 25% in the first half of 2020 due to the lockdowns imposed in both South Africa and Zimbabwe.
It was also stated that total refined production including tolling declined by 46% to 1,246,900 ounces as the temporary closure of ACP and load-shedding in the first quarter impacted production.
Whilst things look a little bleak on the platinum side, Gold’s record run to almost $2,000 an ounce has burnished cash flows and driven a surge in shares of bullion producers. The rally provides a renewed test of discipline for Barrick Gold Corp. and peers after a similar climb a decade ago prompted a spate of inflated deals and overly optimistic investments that wasted billions.
For gold-mining companies, this is great news, with costs contained even after pandemic-related closures, virtually all are churning out impressive cash. In the first three months, Toronto-based Barrick alone generated $438 million in free cash flow based on a realized price of not far off $1,600, compared to $146 million a year earlier.
Valuations look better too, especially for the sector’s largest players.
Power constraints choking sectors, South Africa continues to face electricity woes and there does not seem to be any light at the end of this tunnel.
Earlier in the year newly elected CEO of Eskom, André de Ruyter, positively said that there would only be three days of load shedding this winter however after three weeks of constant load shedding various sectors within the country are feeling the effects, especially the steel sector, this coupled with the impact of COVID and the never ending steel price increases which have now become a back to back pattern, the industry faces serious challenges with high prices, high demand but low output as the lockdown and electricity issues puts strain on production.
So far this year we have seen steel increase on average by 15-20% with rumours of further increases monthly throughout the remainder of 2020.
“Don’t Let Yesterday Take Up Too Much of Today”