Afriforesight Commodities Conference

Suedafrika Kompetenzzentrum - Events-Hauptkategorie Termin speichern
31.07.2018 | 08:00
- 12:30
Balalaika Hotel, Sandton

Commodity Price Forecasts are an essential part of business planning for mining companies, industry suppliers and service providers. On the 31st of July 2018, the Competence Centre for Mineral Resources attended the Afriforesight Commodities Conference to get their assessment of the current state of the South African Mining Industry and their Projections for commodity prices in the short term.

The current state of the mining industry is one of uncertainty. This is primarily caused by the ambiguities and impracticality in the proposed Draft Mining Charter. Mining input costs are up on the back of increased labour and electricity costs. The high cost nature of Conventional Mining methods in the Western Limb of the Bushveld Complex and the Gold sector has led to a sustained lack of investment and decline production in these sectors. The persistent perceptions of corruption and unaccountability in the country, coupled with the planned constitutional changes to explicitly allow for expropriation of land without compensation are thwarting investment in the industry.

The forecasts for important mineral commodities are as follows:

Demand for Uranium is expected to outstrip supply. This will be primarily as a result of anticipated mine closures in Namibia. Barring any extenuating circumstances, the price of Uranium is expected to rise until the end of 2019.

In the context of South African coal India is the biggest export market. Demand from India is expected to stabilize for South African Thermal Coal due to government policies in India. Demand growth for exports from South Africa is expected to come from new markets and off-shoot demand from South Korea and Pakistan in the first half of 2018 is evidence of this. Global supply will remain steady with marginal growth and the Price of Coal expected to remain steady at $90/ton in the short term.

Global inventories are expected to decline and demand is expected to rise for Nickel Briqs, Nickel Powder and Nickel Sulphate from stainless steel and Electric Vehicle battery production. This results in a positive outlook for Nickel prices in the short term as demand growth will outpace supply growth according to forecasts.

Global oversupply is forecast due to increased production from Australia mines in the short term. Consequently, the short term outlook for the price of Lithium is negative. However, the long term outlook is positive due to the forecasted increased in demand from Electric vehicle production.

Supply Growth is expected to lag behind demand growth for copper globally. Consequently, Copper Prices are expected to rise steadily in the Short Term.

Supply from alternative sources (non-mining) results in a negative forecast for the price of Cobalt prices in the short term. The long term outlook is positive due to the anticipated growth in demand for electric vehicles.

Prices are expected to strengthen slightly on the back of heightened geopolitical tensions and stronger growth expectations in jewellery sales due to the improved global economic growth outlook.

Rough diamonds
Jewellery sales are expected to increase and production is expected to decrease as some mines reach end of life. There are few new projects in the pipeline and the price is expected to increase in the short term.

Platinum Prices are expected to fall for the remainder of 2018 due to decreased auto catalyst demand and increased recycling supply from the forecast increase in diesel car scrapping. Prices are expected to rise slightly in 2019 on the back of increased jewellery and investment demand.

Decreased global supply of palladium and softening demand means that the Palladium price will remain relatively stagnant in the short term.

Rhodium demand is expected to increase and supply is expected decrease from South Africa. The outlook for Rhodium is extremely positive in the short term with the price expected to increase for the world’s most expensive metal.

Chrome ore
The price of Chrome Ore is expected to decline for the remainder of 2018 as supply growth outpaces demand growth from stainless steel production. The price will then rise in 2019 due stronger demand resulting from the improved global outlook.

Prices are expected to decline for the remainder of 2018 due to increased supply from South Africa outpacing global demand growth. The price will increase slowly in 2019 due to growing demand for stainless production, but at a faster rate than previously expected due to our improved demand outlook.