Trade Winds bimonthly update volume 38
No increase for July! as the steel sector waited in anticipation, no news is good news as no price increase notices were released for the month of July from the various mills within South Africa, however international steel prices still remain volatile.
This will be only the second time this year that steel prices should remain unchanged barring any other factors such as labour increases or production costs.
South Africa in the midst of the third wave, the COVID-19 pandemic has begun running riot in South Africa with cases sky rocketing. Gauteng is now currently the epicentre of the virus.
Last week President Cyril Ramaphosa placed South Africa under alert Level 3 lockdown but with the cases increasing daily there are talks being held this week that the country could move into a higher level and Gauteng itself being placed into a further lockdown beyond that of the national lockdown.
Border updates, Beitbridge border post faced a water shortage earlier this week causing some delays as the work force at the border was reduced to 50%.
However, the issue was resolved and its all systems go at the border post.
According to personnel at the border, the closure was scheduled to last for 12 hours, from dusk till dawn, starting at 6pm on Monday evening and ending at 6am the following morning but the closure lasted for 24 hours.
There were reports last week that Kasumbalesa experienced delays.
The decision by the government in Kinshasa to test cross-border truck drivers in the Democratic Republic of the Congo itself, rather than risk fraudulent PCR test results for Covid-19, resulting in a queue south of its Copperbelt border crossing in the region of nine kilometres towards Chililabombwe.
Late last week Friday DRC officials called off the decision after irate drivers started refusing to cross into DRC at its busy Kasumbalesa border.
Authorities in Kinshasa initially appeared resistant to persuasion, saying that they had recorded a significant case load of fraudulent PCR tests and that they did not have the means to verify results.
However, the Zambian government’s appeal on behalf of transporters resulted in the DRC finally deciding to accept PCR results from other countries and to roll out rapid testing free of charge in the event of drivers arriving at its border without test results.
Sea carriers looking to add additional vessels, two major shipping lines, one focusing entirely on intra-Asian cargo, have collectively ordered four new vessels to be commissioned in 2023/24, supporting the view that ocean freight is on a juggernaut growth path with no slowing in sight.
The news comes amid growing criticism among agents that carriers, the majority of whom are seeing profits well above 50% while freight rates have spiked by as much as 350%, are not investing in enough newbuilds to address the imbalance between cargo demand and service supply.
In certain instances, criticism from the freight forwarding fraternity has been downright antagonistic, with some agents accusing lines of manipulating vessel calling shortfalls to increase rates on the back of capacity problems.
However, the newbuild order book expansion by Evergreen and intra-Asian carrier SITC serves to suggest the opposite, that lines are indeed beginning to look at rebalancing service vs demand.
Zimbabwe loses a third of its gold to Smugglers, Zimbabwe last year lost around a third of its average gold production to the black market.
The smuggling of gold, Zimbabwe’s top foreign currency earner, is estimated to cost the country $1.5 billion in lost revenue per year, according to the international Crisis Group.
Most of the precious metal is siphoned off by informal small-scale miners who sell their findings to illicit gold traders rather than government-appointed officials.
Fidelity Printers and Refiners on Tuesday announced the country had lost around 11 tons of gold to “leakages” in 2020.
The losses were mainly due to payment delays caused by foreign currency shortages that encouraged miners to sell to smugglers instead, FPR’s head of gold operations, Mehluleli Dube, told a parliamentary mining committee.
Gold miners are usually paid in US dollars, a much more stable and desirable currency than the ever-depreciating Zimbabwean dollar. They were legally obliged to sell 40% of their earnings to the central bank at the official exchange rate but that obligation has been reduced to 20% in an attempt to lure miners to bring gold to Fidelity Printers.
Zimbabwe’s official gold production dropped from a record 33.2 tons in 2018 to 19 tons last year mainly due to fewer deliveries from scall-scale miners. It is noted that small scale miners only sold 9.35 tons of gold to formal buyers last year, compared to 17.48 tons in 2019.
Copper prices climb again, the price of copper regained ground on Monday after hitting a two-month low on Friday. Copper for July delivery was up 0.6% from Friday’s settlement price, reaching $9,196 per tonne midday on Monday in the New York Comex market.
China’s copper exports rose for a third consecutive month in May to reach their highest level since March of last year, customs data showed on Friday, as rising international prices encouraged traders to ship metal abroad.
However, last month’s surge in copper prices on the London Metal Exchange to an all-time high not only made imports less favorable for China, but also spurred shipments in the other direction.
Exports of raw copper and copper products amounted to 79,044 tonnes last month, up 3.4 percent from April and 67.7 percent year-on-year.
SADC leaders to send troops to Moz, Southern African leaders on Wednesday approved the deployment of the Southern African Development Community (SADC) Standby Force to Mozambique.
It is a move that demonstrated regional progress in addressing the crisis.
The deployment was approved at an extraordinary summit, held in Maputo, and attended by all 16 member states, including President Cyril Ramaphosa.
South Africa has repeatedly expressed the need for greater intervention in the region, even as Mozambique seemed resistant.
The deployment followed two extraordinary summits held earlier this year could bring some finality to the back-and-forth deliberations on how to respond to the growing regional crisis.
The SADC Standby Force acts as the region’s peacekeeping force and falls under the SADC’s Organ of Politics Defence and Security.
It is constituted when necessary, and the crisis it is responding to will determine the size of the force.
Upcoming Public Holidays:
30th June 2021 – Independence Day (DRC)
5th July 2021 – Heroes Day (Zambia)
6th July 2021 – Unity Day (Zambia)
“By crawling a child learns to stand”