Mittal shutdown postponed; ArcelorMittal has announced that their planned shutdown at the Newcastle Furnace has been delayed till the end of March.
The announcement comes after the mill decided to build up steel supplies to carry the industry over the three months that it will be in care and maintenance.
There is the rising concern that South Africa will once again face a shortage of steel at the beginning of the second quarter going into Q3 due to Mittal’s shutdown as well as price increases to go along with the shortage.
Please be mindful of the shutdown and plan accordingly.
Global steel prices expected to remain elevated in 2022, players within the steel sector are becoming increasingly cautious in their purchasing requirements. The forward view on global prices is, gradually, turning more negative, particularly for coil products. The record high values reached towards the end of 2021 took many by surprise.
The peak of the price highs occurred at differing points in each region. European prices peaked at their highest level in June of 2021, while those in North America peaked in September as Asian prices levelled off.
The outlook for the start of 2022 is clouded again by Covid-19 sweeping across the globe. The ominous Omicron variant perhaps slowed the recovery in the steel market.
Prices are expected to find support above historical averages, due to increased mill input expenditure and moves to decarbonise the industry. The economic outlook for 2022 is also relatively strong. This is despite downside risks associated with new Covid variants and the expected tightening of monetary and fiscal policy in many countries.
Supply chain shortages are still disrupting the global steel market and are preventing a strong recovery in 2022. Due to the backlogged steel orders, the demand will remain high throughout the year.
Because of the demand for the limited inventory available, steel prices will continue to go up in 2022. The U.S. steel industry is currently valued at $180 billion and began to boom in 2020 thanks to the disruptions caused by COVID-19.
Increased business and consumer spending habits have driven up the demand for steel-bearing products, which are needed for everything from vehicles to food cans. Buyers in some instances are willing to pay more for these products and will continue to pay increased prices throughout 2022.
ATDF, again denies protest, The Port of Richards Bay was the scene of a peaceful, albeit illegal, protest against the employment of undocumented foreign truck drivers on Thursday morning as protesters pulled over several truck drivers before the police intervened.
Upon arrival at the scene, SAPS spoke to a person who was identified as the leader of ATDF on site however, the secretary for the All Truck Drivers’ Forum, Sifiso Nyathi, said the organisation had nothing to do with the protest and that it appeared that unemployed people were using the name, although they had no affiliation to the forum.
Nyathi said the ATDF would oppose the hiring of illegal immigrants via formal, legal channels. Forums have been set up to engage with all relevant parties and government authorities and hopefully it will result in a workable policy that allows the industry to move forward in a positive and safe way.
Airfreight on a tricky path, spike in demand, soaring rates, and a tricky balance between certain markets remaining closed to curb Covid and others reopening to global trade, necessitate fine footwork from the airfreight sector.
The current situation of high demand and even higher rates was expected to last for the duration of the 1st quarter, before tapering off in Q2.
At least that’s what Aero Africa is hoping for, that there’s respite for shippers somewhere in the near future.
Until then, the struggle to find space and allocation for clients in a confined market continued, especially out of China.
Snags on the ocean side are fuelling an overflow of critical orders to air, sustaining demand, but capacity into Africa and its important sub-Saharan transhipment hub of South Africa remained a problem.
South Africa’s block space agreement out of China is on hold because the carriers are on hold, China cannot commit to freighters in South Africa because they are going into the US where the yield is better and as a result, options out of China have become few and far between, with agents fighting for space that is often elsewhere allocated because of market dynamics which is attributed to the strength of the dollar and the primacy of American imports to name a few.
Ocean freight costs expected to remain high throughout 2022, Shipping rates are expected to stay elevated well into 2022, setting up another year of booming profits for global cargo carriers.
The spot rate for a 40-foot container to the US from Asia peaked at just over US$20,000 last year up from less than US$2,000 a few years ago and was recently hovering near US$14,000.
Tight container capacity and port congestion also mean that longer-term rates set in contracts between carriers and shippers are running at around 200% higher than a year ago, which signals that elevated prices are here to stay for the foreseeable future.
Larger customers like retail or tech giants have the power to negotiate better terms in those deals or absorb the added expenses whereas the smaller importers and exporters that rely on carriers to haul everything from electronics and apparel to grains and chemicals, cannot easily pass those costs along or weather long periods of stretched cash flows.
Regulators from the US, the EU and China met in September and determined there was so far no evidence of anti-competitive behaviour in container shipping. Governments are on high alert as global supply chains are being pushed to the breaking point.
The US Federal Maritime Commission says it has increased monitoring of carrier alliances, to better track trends and spot potential illegal behaviour, such as artificially limiting supply or not competing on prices.
Zambia to continue with plans to sell KCM, Zambia’s state-appointed liquidator who is managing the affairs of KCM said he would proceed with the dismantling of the company and the sale of its assets.
This was after the Lusaka Court of Appeal earlier this month declined to discharge the liquidator, Milingo Lungu, despite ruling earlier that he should arbitrate a dispute with KCM’s majority shareholder, Vedanta Resources.
ZCCM Investment Holdings, a 20.6% stake holder in KCM, applied to put the company into provisional liquidation in 2019. Vedanta argued the step was unlawful as there were conditions in their shareholders’ agreement allowing for dispute resolution.
ZCCM said Vedanta had failed to invest in KCM’s assets and had not paid dividends as previously promised.
Despite being asked to enter into arbitration proceedings with Vedanta, Lungu said that he would divide KCM into halves, effective January 31, and then embark on an asset disposal programme.
Zimplats allowed to set up solar plants. The Zimbabwe Energy Regulatory Authority announced on Friday that it had granted Zimplats a licence to construct, own, operate and maintain a 105 MW solar power plant at Ngezi Mine.
A similar notice was also published but this time for the generation of an 80 MW solar power plant at Zimplats’ Selous Mine in Chegutu.
Zimplats says setting up the two power plants will cost the company as much as $201 million.
Zimplats is not the only miner that has turned to solar power as gold miner Caledonia Mining, which runs Blanket Mine in Zimbabwe is constructing a 12 MW solar plant which is expected to be operational this year and will exclusively supply Blanket with approximately 27% of its daily electricity usage.
Copper prices on the rise, the copper price rose on Wednesday, supported by expectations of further policy easing in China.
March delivery contracts were exchanging hands for $9,856/tonne on the Comex market in New York, up 2.3% compared to Tuesday’s closing.
The most-traded March copper contract on the Shanghai Futures Exchange was steady at $11,026.46/tonne.
China, the world’s biggest buyer of metals, has been stuck in a property market slump, credit stress and repeated virus outbreaks. In response, the central bank this week cut its policy interest rate for the first time in almost two years, signalling the beginning of an easing cycle.
China’s copper exports rose to an annual record of 932,451 tonnes in 2021, according to customs data.
Gold also rose to its highest in two months this past Wednesday.
Fears that insurgents planning more attacks in Cabo Delgado, The SADC has warned that insurgents are regrouping for more coordinated attacks.
While SADC has noted considerable gains in Cabo Delgado, there are genuine fears that insurgents have withdrawn to regroup and are planning rejuvenated attacks.
“The insurgency is not yet neutralised. The violent extremists are regrouping, launching attacks from several parts of Cabo Delgado and they are also expanding to neighbouring province Niassa where they have launched significant attacks,” said Professor Adriano Nuvunga – the Director of the Centre for Democracy and Development.
SADC sent in its Standby force into Mozambique’s gas-oil rich Cabo Delgado in July last year, a month after Rwanda sent in troops.
At the onset of the SADC Mission in Mozambique, Nuvunga said the insurgents were disbanding. However, six months later, they had changed their strategy.
At the beginning of the deployment, the country saw violent extremists disbanding. Now they have seen them regroup and move in terms of recruitment.
On December 15 last year, Islamic extremists in Nova Zambezia, Macomia district, beheaded a pastor and instructed his wife to take his head to the police with a message: “While you [government forces] are walking on tarred roads, real men [insurgents] are in the woods.”
As a show of power, the insurgents operating from the bush ambushed SAMIM forces in the east of Chai in the northern Macomia district on the night of December 19, resulting in the death of a South African soldier.
Intel also suggests that the insurgents have support within communities they operate, with some civilians assisting them in transporting arms.
Since the insurgency began in 2017, there have been 1,111 cases of political violence with 3,627 reported fatalities during these attacks and 1,587 reported fatalities from violence targeting civilians.
“Great things are done by a series of small things brought together.”
Expected steel price increase, A small transport fee has been added to the price of steel coming from the mills to combat the ever-increasing price of fuel in the region of 2.5% with an expected steel increase on the horizon as well. As of now there is no formal notice from the mills, but the sector is bracing itself for the inevitable as the industry continues to battle with fuel and labour hikes as well as electricity cuts whether the increase is for December or January remains to be seen.
HDPE prices will also increase at the beginning of next year in the region of 6.5% on all HDPE products.
Border updates, for the first time, we can report no issues at any of our surrounding borders, seems that delays at Beitbridge really are a thing of the past.
New covid variant causing havoc in SA, the newly discovered covid variant B.1.1.529 has sent shockwaves throughout South Africa and the world alike, as countries like the UK, Germany and Italy have banned flights from South Africa as of midday today with the European Union considering banning all flights from South Africa as well. The UK has also banned flights from Namibia, Lesotho, Botswana, Eswatini and Zimbabwe.
Israel also announced it will ban its citizens from travelling to southern Africa, covering the same six countries as well as Mozambique and barring the entry of foreign travellers from the region.
The rand has taken a huge knock as the country has been placed on the UK’s red list further weakening an already struggling economy.
Fuel price driving inflation up, South Africa’s transport sector was the largest contributor to inflation in the country, the Bureau for Economic Research says in its latest weekly assessment.
With the headline Consumer Price Index measured at 5% year-on-year in October, it marks the sixth consecutive month that inflation has been above 4.5%, the Bureau says.
This is also the midpoint of the Reserve Bank’s target, hence last week’s 25 basis point increase in the repo rate.
The largest contributor to the annual inflation figure was transport, which climbed 10.9% year-on-year, adding 1.5% pts. This was mainly attributable to fuel prices which increased by 23.1% year-on-year, up from 19.9% year-on-year in September.
Local mines could invest R60 billion to combat load shedding, South African mining companies are poised to spend 60 billion rand ($3.8 billion) on renewable energy projects in hope to help ease the country’s electricity supply crisis.
The industry is planning 3,900 megawatts of solar, wind and battery energy projects, which could supplement supplies from state-owned utility Eskom Holdings SOC Ltd.
Earlier this year, President Cyril Ramaphosa raised the limit on companies producing power without a license to 100 megawatts from 1 megawatt, clearing the way for miners to start generating their own electricity.
South Africa experienced record outages this year, stifling an economic rebound from the pandemic in the continent’s most industrialized economy.
The industry, including the world’s top platinum and rhodium producers, is the country’s biggest user of electricity.
Sibanye Stillwater plans on adding 475 megawatts of solar and wind-power capacity, whilst Anglo American Platinum Ltd aims to start generating around 100 megawatts of renewable power at its Mogalakwena mine by the end of 2023.
Impala Platinum Holdings Ltd. is weighing options to have all its mines in South Africa and Zimbabwe use solar power.
SA Port costs too high considering turnaround time, South Africa’s private sector freight industry, for the most part, believes that the country’s port costs are too high.
Especially at congested ports like Durban.
Constant equipment failure, labour issues, and efficiency headaches contribute to widely shared criticism that the country’s ports are not being run as they should.
Looking at where the World Bank rated SA ports during a performance index released in May.
Not only were South Africa’s ports outperformed by the likes of the Port of Djibouti, but it also served to stoke fears that nearby ports like Walvis Bay, Maputo, Beira and even Dar es Salaam, were sniffing at a slice of the country’s ports’ pie.
Transnet National Ports Authority doesn’t seem to be sharing the view that the ports aren’t run properly.
In a media briefing, Transnet said that they were so efficient that the price was almost irrelevant, suggesting that they were worth the cost.
What exporters and importers pay to ship through South Africa’s ports, it said, translated into savings elsewhere along the supply chain.
Brace yourselves, Airfreight rates to rise further, Airports are under the whip as demand continues to exceed capacity and Covid-safe work practices and apparent labour shortages continue to place immense pressure on UK, EU, US and global air freight hubs, creating congestion from Heathrow to Azerbaijan.
According to UK-based logistics provider Metro Shipping which points out that while there are different situations at different airports, the demand for air cargo is exceptionally high. In addition, ground-handling operations are proving to be consistently ineffective at servicing the upturn in freighters, and passenger freighters, with problems at Heathrow, Amsterdam, Brussels and Frankfurt in Europe alone.
Metro believes that despite the congestion, the already exceptionally high airfreight prices will climb further as supply chain disruptions force ocean freight shippers to switch to airfreight.
The issue is however endemic as US, European and Asian hubs are experiencing the same problems. Metro believes it’s unlikely to improve any time soon as ocean freight is continuing to look at airfreight as a logistic solution.
Predictions are that the air cargo boom will continue well into next year, and possibly 2023, as it may take that amount of time for the passenger schedule to return to pre-Covid levels.
Zim economy on the right path, the Zimbabwean government has broken the shackles the economy has been in and is on the right path to start realising meaningful returns despite economic headwinds that have hindered its progress.
Mr. Holtzman, Chairman of CBZ Holdings, Zimbabwe’s biggest bank, expects a full turnaround by the end of this year after a challenging financial year.
The growth prospects for Zimbabwe come at a time where the IMF has upgraded its estimate for economic growth this year to 6 percent from 5.1 percent on the back of increased activity within the manufacturing and construction sectors.
Zimbabwe currently possesses potential which if exploited correctly can turn the country’s fortune around with agriculture being singled out as one sector which has gained a considerable amount of traction as farmers are now drifting towards high-value crops for the export market.
Excluding the agriculture sector, Zimbabwe currently has huge nickel and lithium deposits, minerals whose importance is increasing given the global trends in technology where economies are moving towards the use of electrical cars and cleaner energy.
DRC looking to develop domestic battery manufacturing, DRC mines the majority of the world’s cobalt, an ingredient in lithium-ion batteries, and is Africa’s leading producer of copper. Demand for the minerals is rising to power electric vehicles and electronic devices.
However, on the flipside DRC, which ranks among the world’s least developed countries, exports its minerals for only a fraction of the final cost of the batteries, which are mostly manufactured in Asia.
Prime Minister of DRC, Sama Lukonde announced a series of measures aimed at speeding the development of a battery manufacturing industry which includes the creation of a “Battery Council” with the aim of driving the government’s policy to develop a regional value chain around the electric battery industry.
Minister Lukonde did not provide specific details about how long these initiatives would take to set up or how they would be funded, although several development banks, including the African Development Bank, has signed a pledge to help develop Congo’s battery industry
President Hakainde Hichilema of neighbouring Zambia, Africa’s second-largest copper producer has said that his country is ready to work with Congo and others in the region to develop Africa’s industrial capacity.
Bureau Veritas hit with cyberattack, Bureau Veritas (BV), detected an attempted cyber-security breach last week, forcing the company to take its data and servers offline.
Earlier this week it was reported that BV had decided to immediately institute the necessary preventative measures.
The attack comes after BV recently warned that it had become aware of increased risk to global supply chain interests, especially against the backdrop of ongoing pandemic challenges.
The disruption caused to supply chains the world over by the virus, risk assessors say, is playing into the hands of cyberattackers wanting to exploit existing conditions of instability.
Please note all BV inspections have been halted for now and we will continue to monitor the situation.
World’s first electric container ship sets sail, The world’s first electric and self-propelled container ship, Yara Birkeland, has set sail.
The self-propelled container ship departed from Horten in Norway on the morning of November 18 and arrived in Oslo in the early evening.
A joint venture between chemical production firm Yara and maritime technology company Kongsberg, the vessel is expected to cut 1 000 tonnes of CO2 and replace 40 000 trips by diesel-powered trucks a year.
It will be used to transport fertiliser between Porsgrunn and Brevik.
Plans for the construction of the vessel were announced back in 2017.
Its launch marks the start of a two-year testing period of the technology that will make the ship self-propelled, and finally certified as an autonomous, all-electric container ship.
The 80-metre-long vessel has capacity for 120 TEUs and the cost of construction is estimated at $25 million.
In parallel with the project, Yara has initiated the development of green ammonia as an emission-free fuel for shipping, through its newly launched Yara Clean Ammonia.
Yara, the world’s largest producer of fertilisers, relies on ammonia to make fertiliser, and to help feed an ever-growing population. At the same time, current ammonia production represents 2% of the world’s fossil energy consumption. This corresponds with about 1.2% of the world’s total greenhouse gas emissions.
“Nothing in the world is ever completely wrong. Even a stopped clock is right twice a day”