Trade Winds Volume 64

Apr 9, 2024 Posted by: Abeyla Exports Trade Winds


Despite the challenges of trade, Abeyla Exports continues to deliver a reliable import and export service to customers. Our success is built on relationships with our international and regional manufacturers to mitigate any quality issues and add value to your supply chain.

As traders, we provide even more value by saving costs and improving longevity of product wherever possible. Although there are always challenges to overcome, our strength is finding solutions, making it work, quickly – without the hassle, and with a smile!                                                                    

Currency News

 Zimbabwe launches new gold-backed currency – ZiG

In efforts to stabilize Zimbabwe’s economy, ‘Zimbabwe Gold’ – or ZiG, will replace the Zim dollar, the RTGS (it has lost three-quarters of its value so far this year). The ZiG will be set at a market-determined exchange rate.

Annual inflation in March reached 55% – a seven-month high. Zimbabweans have 21 days to exchange old notes for the new currency. However, the US dollar, which accounts for 85% of transactions, will remain legal tender with most people likely to continue to prefer this.

 Logistics News

 A challenging time for shipping

With ongoing disruption in the Red Sea and Panama Canal, market volatility, the Baltimore bridge collision, disruption following the Taiwan earthquake, and sustained pressure on the market, the industry expects the following issues to continue for the foreseeable future:

-increased congestion

-price increases – including of containers and fuel

– disruptions in container availability and transportation

– increased delivery times

 We expect longer wait times for vessels, trucks, and trains at ports. For any concerns or questions, please reach out to your Abeyla Exports team.

 Durban Port’s new terminal opens.

 The USD 181.5 million (R3.4 billion) Newlyn PX Terminal at Durban Port is now open – a model for the public-private partnerships urgently needed to upgrade its port infrastructure.

 This comes when local municipalities need new investment following devastating riots in 2021 and severe floods in 2022, which caused billions of rands of damage to the economy.

 Mining News

 Shanta Gold shareholders approve Saturn Resources takeover

East Africa-focused gold explorer and producer, Shanta Gold, has approved the final USD 180.7 million cash offer for acquisition by Tanzania-based Saturn Resources (part of ETC Holdings).

It said the valuation of publicly listed gold companies has de-rated, with UK-listed African gold miners an example of this trend. They are now trading over 40% down (on a Price to Net Asset Value or P/NAV) basis than five years ago.

Shanta owns and operates two gold mines in Tanzania — New Luika, the country’s fourth largest mine, and Singida. It also has the West Kenya project, believed to be among Africa’s highest-grading gold assets.

 ‘Water issue’ concerns as Rio Tinto wants ‘impeccable ESG’

The hunt for minerals, including copper, lithium, nickel, cobalt and iron ore for the clean energy transition, has boosted the number of mining projects globally. Mining is driving deforestation of tropical rainforests and causes 4-7% of greenhouse-gas global emissions.

As miners come under increased pressure for transparency around their Environmental, Social and Governance (ESG) matters, Rio Tinto is under pressure to come clean on environmental issues, including water and biodiversity.

 It aims to reduce its direct and indirect emissions by 15% by 2025 and 50% by the end of the decade. It has pledged to invest USD 5–6 billion in decarbonization projects until 2030.

 Harmony Gold agrees wage deal.

 South Africa’s Harmony Gold has signed a five-year wage deal with trade unions which will see the majority of workers receiving inflation-linked wage increases for the next five years.

 Copper price jumps to new 14-month high

The copper price is at a 14-month high following rising supply risks and hopes for a recovery in global demand. Disruptions at major mines means smelters are paying steep prices for mined ore. In response, Chinese plants (producing more than half of the world’s refined copper) are moving closer to a joint cut in output.

But early signs of growth in the global manufacturing sector are causing optimism that tight market conditions could help copper achieve new records.

 Platinum price set to stay low

In a sign that the platinum, palladium and rhodium prices will stay low the JSE’s four largest platinum miners have cut nearly R30bn in planned capital and business expenditure.

It could take two years before the platinum group metals (PGMs) industry recovers. 2023 was not a good year for – the price of palladium fell 40%; rhodium fell 62%; platinum by 10.4%; and the average PGM basket price continues to slide.

That’s it for this edition of Trade Winds – thanks for reading!

          To discuss this or any other questions, please contact your Abeyla team.