Trade Winds bimonthly update volume 49
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.
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