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COMMODITY NEWSBRIEFS: 29 FEBRUARY 2016
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AUTOMOTIVE AUTO EXECS PROVIDE INSIGHT INTO 2016’S BIGGEST RISKS AND OPPORTUNITIES (Engineering News, 29/2/2016) This year offers few silver linings for the local automotive industry. Faced with a faltering rand, a jittery global and domestic economy, as well as the trepidation local elections and triennial wage negotiations bring, it seems local vehicle importers and manufacturers will have to hunt for a white rabbit and a black hat to outpace a new-car market which promises to be down almost 10% on 2015. Glimmers of hope include exports – taking advantage of the limping currency – and launching a number of new models that will convince consumers to open their wallets in an environment of growing inflation, rising vehicle prices and higher interest rates. Engineering News canvassed a number of automotive leaders on their outlook for 2016, among others - National Association of Automotive Component and Allied Manufacturers Adviser Roger Pitot who said that the biggest challenge for this year can be summarised in one word: the economy. The sudden devaluation of the rand will see price increases across the board, vehicles included. This means lower vehicle sales in 2016, which is bad news for our members in terms of component production. There is a belief that the weak rand creates export opportunities, but the global economy is not looking too healthy, especially considering low oil prices and the weakening of a number of global currencies. This means we do not expect the exports of vehicles or components to increase significantly. The second challenge is the wage negotiations set to take place later this year. We must try, by all means possible, and in the interest of South Africa, to avoid a strike. Any strike will impact negatively on the image of the country. Biggest opportunity: Opportunities for 2016 include the fact that many vehicle manufacturers have announced plans to produce new models in South Africa, which is a positive sign for the long-term growth of the automotive industry. These new models should create opportunities for local components manufacture. This also creates a challenge, however, as there are many components that involve technologies that are not currently available in South Africa. This is where the Automotive Supply Chain Competitiveness Initiative may play a role in developing local suppliers in South Africa. FUEL EXPECT A 70C A LITRE DROP IN PETROL PRICE – AA (Engineering News, 29/2/2016) Lower international petrol prices and a stronger rand will be a boost for motorists in March, who will likely see a 70c a litre drop in the petrol price, the Automobile Association (AA) said on Friday. “Some measure of stability had returned to the fuel price picture,” said the AA. The Department of Energy will release the official fuel price rate any time between Friday and Monday and it will be implemented on Wednesday. However, the AA warned that Treasury’s decision to add a further 30c to
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the fuel levy could dampen the mood in April, when the measure will be implemented. The AA said it was concerning that motorists were again being called upon to fund shortfalls in government revenue. "The National Treasury forecasts that the increased levy will add approximately R6.8-billion to the fiscus. This revenue is collected from the most economically active and heavily-taxed sector of the population," the association commented. The AA also commented that government appeared uncertain over its approach to increases in the fuel levy. "When a moderate increase of 10c to 15c a litre was proposed to fund the Gauteng Freeway Improvement Project, it was rejected by Sanral," it said. The AA said the combined increase in the fuel levy over the past two budgets amounted to 60.5c a litre, with an additional 50c a litre going to the Road Accident Fund since 2015. Organisation Uniting against Tax Abuse chairperson Wayne Duvenage on Wednesday questioned why government could increase the general fuel levy by 60c over two years, but can’t add another 9c to cover e-tolls. “It seems strange government claims it cannot place an additional 9c on the fuel levy to cover e-tolls as this will affect the poor, yet it has no problem increasing the general fuel levy by 60c over the past two years,” he said. The AA said a steady appreciation in international diesel prices has meant that diesel will be up by around 15c a litre. COAL EUROPEAN COAL OVER $10 CHEAPER THAN ASIAN BENCHMARKS AS END OF WINTER LOOMS (Mining Weekly, 29/2/2016) European thermal coal prices are at a discount of over $10 a tonne to Asian benchmarks as the end of the winter season dents power demand and strong renewable output curbs the need for coal-fired electricity generation. Average temperatures in most of continental Europe are expected to drop from around 3 degrees Celsius currently - which is 1 degree below the seasonal norm – to 6-7 degrees by the first week of March, according to weather data in Reuters, crimping power and heating demand. Coal cargoes for delivery into Amsterdam, Rotterdam or Antwerp (ARA) last closed at $43.75 per tonne, still close to a multi-year low of $41.95 a tonne reached on February 22. The mild European weather outlook and strong renewable power generation, which is also supported by rising solar output as the short winter days get longer moving into spring, meant that European coal prices are over $10 cheaper than benchmarks from Australia's Newcastle terminal, which last settled at $54.15 per tonne. Shipments for prompt delivery from South Africa's Richards Bay terminal were last valued at $54.40 a tonne. But traders said that especially Australian coal prices would likely come under pressure soon as well. "China's winter is also ending and we can already see a sharp fall in orders from Australia," one trader said. China's coal imports in January from top supplier Australia fell 16 percent from a year ago to 4.27 million tonnes, with demand for overseas supplies hit by a domestic supply glut as well as the looming end of winter. Japan's January coal imports from Australia were also down, falling 13% to 7.73-million tonnes, with overall Japanese monthly imports down 13.2% to 9.71 million tonnes. CURRENCIES AND PRICES
JSE AS AT 17:00PM 26 FEBRUARY 2016
All Share Index
26/02 49,429 + 2.18%
Industrials Index
26/02 40,465 + 0.97%
Financials Index
26/02 39,288 + 1.11%
Top 40 Index
26/02 43,858 + 2.61%
Industrial 25 Index
26/02 67,992 + 2.51%
Financial 15 Index
26/02 14,426 + 1.19%
Resources 10 Index
26/02 27,282 + 3.13%
Alt-X Index
26/02 1,508 - 0.73%
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WORLD INDICATORS
FOREX
Rand/Dollar 06:31 16.1684 + 3.63%
Rand/Pound 06:55 22.3901
+ 3.09%
Rand/Euro 06:55 17.6709 + 2.92%
COMMODITIES
Gold (usd/oz) 06:55 1,225.70 - 0.65%
Platinum (usd/oz) 06:55 919.00
+ 0.69%
Brent (usd/barrel) 06:51 35.51 + 0.62%
WORLD MARKETS
Wall St (DJIA) 26/02 16,640 - 0.34%
Germany (DAX) 26/02 9,513
+ 3.77%
Japan (Nikkei) 06:57 16,210 + 0.13%
3month
(Business Report, 29/1/2016)
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(TFR Commercial Management: Business Performance Dept)
Petrol/ Diesel Price
YR2016 06-Jan-
16 03-Feb-
16 02-Mar-
16 06-Apr-
16 04-May-
16 01-Jun-
16 06-Jul-
16 03-Aug-
16 07-Sep-
16 05-Oct-
16 02-Nov-
16 07-Dec-
16
COASTAL
95 LRP (c/l) 1194.00 1200.00
95 ULP (c/l) 1194.00 1200.00
Diesel 0.05% (c/l) 972.47 910.47
Diesel 0.005% (c/l) 977.87 914.87
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Illuminating Paraffin (c/l) 594.028 535.028
Liquefied Petroleum Gas
(c/kg) 1892.00 1893.00
GAUTENG
93 LRP (c/l) 1209.00 1215.00
93 ULP (c/l) 1209.00 1215.00
95 ULP (c/l) 1237.00 1243.00
Diesel 0.05% (c/l) 1005.17 943.17
Diesel 0.005% (c/l) 1010.57 947.57
Illuminating Paraffin (c/l) 647.028 588.028
Liquefied Petroleum Gas
(c/kg) 2074.00 2075.00
YR2015
07-Jan-
15
04-Feb-
15
04-Mar-
15
01-Apr-
15
06-May-
15
03-Jun-
15
01-Jul-
15
05-Aug-
15
02-Sep-
15
07-Oct-
15
04-Nov-
15
02-Dec-
15
COASTAL
95 LRP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00 1196.00 1197,00
95 ULP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00 1196.00 1197,00
Diesel 0.05% (c/l) 997.49 895.49 969.49 1090.09 1085.09 1134.09 1138.09 1062.27 1008.27 1061.27 1052.27 1048,47
Diesel 0.005% (c/l) 1001.89 899.89 973.89 1096.49 1091.49 1137.49 1141.49 1067.67 1016.67 1067.67 1057.67 1055,87
Illuminating Paraffin (c/l) 697.728 595.728 668.728 690.828 685.828 727.828 733.828 663.828 608.828 658.828 656.828 657,028
Liquefied Petroleum Gas
(c/kg) 1829.00 1679.00 1833.00 1918.00 1935.00 2035.00 2091.00 2002.00 1887.00 1898.00 1851.00 1847,00
GAUTENG
93 LRP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00 1208.00 1209,00
93 ULP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00 1208.00 1209,00
95 ULP (c/l) 1124.00 1031.00 1127.00 1289.00 1289.00 1336.00 1377.00 1326.00 1257.00 1261.00 1239.00 1240,00
Diesel 0.05% (c/l) 1028.09 926.09 1000.09 1122.79 1117.79 1166.79 1170.79 1094.97 1040.97 1093.97 1084.97 1081,17
Diesel 0.005% (c/l) 1032.49 930.49 1004.49 1129.19 1124.19 1170.19 1174.19 1100.37 1049.37 1100.37 1090.37 1088,57
Illuminating Paraffin (c/l) 747.928 645.928 718.928 743.828 738.828 780.828 786.828 716.828 661.828 711.828 709.828 710,028
Liquefied Petroleum Gas
(c/kg) 2011.00 1861.00 2015.00 2100.00 2117.00 2217.00 2273.00 2184.00 2069.00 2080.00 2033.00 2029,00
(SAPIA online)
Daily prices for 26 February 2016
LME Official Prices, US$ per tonne
Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC
Cash Buyer 1555.00 1587.50 4680.50 1713.50 8405.00 16100.00 1740.00 1665.00
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Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC
Cash Seller & Settlement 1565.00 1588.50 4681.00 1714.00 8410.00 16125.00 1741.00 1666.00
3-months Buyer 1580.00 1571.00 4680.50 1710.00 8425.00 15850.00 1742.00 1675.00
3-months Seller 1590.00 1571.50 4681.00 1711.00 8450.00 15875.00 1742.50 1680.00
15-months Buyer 15560.00
15-months Seller 15610.00
Dec 1 Buyer 1650.00 1627.00 4665.00 1728.00 8565.00 1753.00 1730.00
Dec 1 Seller 1660.00 1632.00 4675.00 1733.00 8665.00 1758.00 1740.00
Dec 2 Buyer 1677.00 4665.00 1745.00 8665.00 1747.00
Dec 2 Seller 1682.00 4675.00 1750.00 8765.00 1752.00
Dec 3 Buyer 1737.00 4680.00 1775.00 8750.00 1745.00
Dec 3 Seller 1742.00 4690.00 1780.00 8850.00 1750.00
(London Metal Exchange, 29/2/2016)
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