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COMMODITY NEWSBRIEFS: 9 SEPTEMBER 2015 Please note that these articles are available in electronic format and can be requested and delivered via e-Mail.

(http://intra.spoornet.co.za) Natasha.Havenga@transnet.net

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AUTOMOTIVE TMSA MULLS EXPORTS AS IT SEEKS TO LIFT ROSSLYN PLANT CAPACITY UTILISATION (Engineering News, 9/9/2015) Automotive assembler Tata Motors South Africa (TMSA) plans to start exporting its vehicles to neighbouring countries in Africa. Addressing an African media delegation, in India, Tata Motors commercial vehicles executive director Ravi Pisharody said TMSA’s Rosslyn truck plant, in Pretoria, currently only used about 55% to 60% of its capacity. “[Therefore], there is room to start exporting,” he said, explaining, however, that the company would look at expanding the facility, which was opened in 2011, only when it was operating at full capacity. This was not expected to occur within the next two to three years. In the meantime, the company would add new vehicles to those currently being assembled at the plant. The Rosslyn plant currently produces trucks of 3.5 t gross vehicle mass and above, which translates into participation in the medium, heavy and extra-heavy commercial vehicle segments. Meanwhile, Pisharody told the delegation that Tata Motors had plans to open an assembly plant in Nigeria within the third quarter of this year. Tata would partner with a local company that already had a facility near Lagos. The Nigerian company was also considering opening an additional facility. “A few years from now, our biggest business will be in Nigeria,” he said. FAST MOVING CONSUMER GOODS CONSUMER IMPACT COULD GRIND ECONOMY TO A HALT (Engineering News, 9/9/2015) If consumer confidence continues to dwindle, the South African economy will grind to a halt, according to the South African Institute of Race Relations (IRR). An IRR report highlights consumer behaviour and spending power, and how much the South African economy depends on consumption expenditure. The report found that because consumers are under growing economic pressure, the economic outlook was even worse. Consumer spending plays a pivotal role in the economy, with household consumption expenditure being equivalent to over 60% of gross domestic product (GDP). IRR analyst Gerbrandt van Heerden said a particularly important finding related to credit extension. During the high economic growth years of 2004 to 2007 – when the economy averaged growth in excess of 5% of GDP – levels of consumer confidence and spending peaked. In recent years, however, confidence levels have fallen, reaching decade lows.

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INDUSTRIAL VALUE-ADDED PRODUCTS A SOLUTION – DAVIES (Business Report, 9/9/2015) Trade and Industry Minister Rob Davies has warned that the economy is facing a crisis and has called for a shift to value-added products to reignite the economy. Davies told journalists in Parliament yesterday, during a briefing after he had tabled his annual report to the portfolio committee on trade and industry, that value-added goods would lift up the economy. He said the contraction of the economy in the second quarter had provided some valuable lessons to the government to move up the value chain. Things could no longer continue as business as usual, he said. He said focusing on value-added products in manufacturing, clothing and textile and business processing would bring life into the economy. Davies was the latest senior member of the cabinet to warn of the serious challenges facing the economy, and the impact this would have on growth. However, the minister would not say if South Africa could enter into recession. He said the contraction of the economy in the second quarter signalled problems ahead, but this did not suggest that the country could be in recession. He said the falling of the commodity prices in the mining industry had called for the government to look at other areas to grow the economy. IRON SHRINKING IRON ORE IMPORTS YET ANOTHER SIGN OF CHINA SLOWING (Moneyweb, 9/9/2015) China’s iron ore imports contracted last month, adding to evidence that a deepening slowdown in the world’s second-biggest economy is hurting demand for raw materials. Inbound cargoes fell 14 percent to 74.12 million metric tons from 86.1 million tons in July, which was the highest level this year, according to customs data Tuesday. Imports for the first eight months declined 0.2 percent to 613 million tons. After decades of rapid growth and an unprecedented expansion in steel production, China is now grappling with excess capacity as a property-led slowdown crimps demand. Iron ore prices tumbled in July to their lowest in at least six years as surging low-cost output from Rio Tinto Group in Australia and Brazil’s Vale SA swamped the market. Deadly explosions at Tianjin port last month also disrupted shipments and may have reduced the import figure, according to Shenhua Futures Co. Ore with 62 percent content delivered to Qingdao rose 0.6 percent to $56.85 a dry ton on Monday, according to Metal Bulletin Ltd. The raw material sank to $44.59 on July 8, a record low for the price dating back to May 2009. The slowing economy and a weak property sector have hurt domestic steel demand, curbing output and iron ore purchases. Mills in the world’s biggest producer are still making more steel than the economy needs as they benefit from cheap ore, Lourenco Goncalves, chief executive officer of Cliffs Natural Resources Inc., said in an interview last month. The surplus is spilling onto world markets. Steel-product exports were sustained in August around the highest since January, adding to a flood that has battered global prices. Outbound shipments were 9.73 million tons, 25 percent more than a year earlier, according to customs. Exports in the first eight months climbed 26.5 percent from a year earlier to 71.9 million tons. Credit Suisse Group AG estimates that shipments were in line with total output from Japan, the world’s second-largest producer. Exports may rise to 111 million tons in 2015, according to Macquarie Group Ltd.’s head of commodities research Colin Hamilton. Last year, the country shipped 94 million tons. STEEL See article “SHRINKING IRON ORE IMPORTS YET ANOTHER SIGN OF CHINA SLOWING” under heading IRON FUEL SALDANHA BAY COULD GET SA’S FIRST LNG IMPORT TERMINAL (Moneyweb, 9/9/2015) South Africa could build its first R20 billion liquefied natural gas (LNG) import facility at the west coast port of Saldanha Bay to feed gas-to-power projects aimed at easing chronic supply shortages, an official said on Tuesday. Importing LNG is among the options Africa’s most developed economy is considering to diversify its energy sources away from coal and ease power shortfalls that have curbed growth. Several companies, including Shell, Mitsubishi and Sasol, are expected to bid for 3,126 megawatt (MW) gas-to-power projects in the first quarter of 2016, when exact details will become known. “Saldanha Bay ticks all the boxes,” Fernel Abrahams, project manager for the LNG project at the Western Cape provincial government told Reuters. He said the plan would be to build an import facility at, or close to Saldanha Bay, South Africa’s deepest natural port and emerging oil and gas hub, with pipelines supplying enough gas for power plants to supply thousands of industrial users and homes stretching to Cape Town around 150 km (90 miles) away. Richards Bay in KwaZulu-Natal province and

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Coega in Eastern Cape province have also been mooted as possible sites for an LNG import terminal. The Department of Energy is expected to decide on the terminal and its location next year. Abrahams said Angola and Nigeria were among likely source markets for the LNG. The country is close to new oil and gas strikes offshore of Mozambique and Tanzania, as well as existing fields from Africa’s top two oil producers Nigeria and Angola. COAL PETMIN POSTS 62% INCREASE IN FY HEADLINE EARNINGS (Mining Weekly, 9/9/2015) Disciplined management, cost control and a solid operating performance at the Somkhele anthracite mine have contributed to a 62% rise in JSE-listed Petmin’s headline earnings per share (HEPS) for the year ended June 30 to 24.28c, from 14.95c in the previous year. CEO Jan du Preez noted in a conference call on Tuesday that, despite tough market conditions, the company still achieved good results, with the South Africa-based miner reporting a 30% increase in normalised earnings to R132.1-million and a 35% increase in net cash flow from operating activities to R901-million. Turnover increased by 25% year-on-year to R1.3-billion. Saleable anthracite production at the mine increased by 19% to 1.3-million tonnes, while anthracite sales also rose by 19% to 1.2-million tonnes, predominantly owing to supply constraints affecting other producers. Average prices for inland sales were unchanged from 2014, but average export prices dropped 2% in the year under review. Seventy one per cent of Somkhele's export sales were dollar-denominated with the remaining 29% in rands. The average dollar price of export sales dropped by 4%, offset by a 9% weakening of the average exchange rate. MINERAL MINING ZUMA TRIES MEDIATION TO PREVENT JOB LOSSES (Business Report, 9/9/2015) President Jacob Zuma yesterday met mining houses and organised labour to limit plans to shed thousands of jobs. However, analysts cast doubt on the impact of the meeting on limiting retrenchments, given the sector’s substantial challenges. The meeting in Pretoria follows Zuma’s recent warning to companies chasing profits and labour seeking higher wage increases to tighten their belts to save jobs as the economy was “sick” when he launched the first unit of Eskom’s Medupi power station a week ago. Earlier this month, Mineral Resources Minister Ngoako Ramatlhodi got trade unions and mining houses to commit to limiting job losses. “There is a lot of cosmetic action going on, and the end point is the same… I am not sure that the meeting changes anything as the fundamentals of jobs losses will remain,” Peter Montalto, an economist at Nomura International based in London, said yesterday. The ailing mining industry accounts for 7 percent of the country’s gross domestic product and about 12 000 jobs are at risk as mining houses, including Lonmin, the world’s third largest platinum producer and global diversified mining company Anglo American plan to cut jobs. Peter Major, a mining consultant at Cadiz Corporate Solutions, said politicians had no chance of turning things around by having one-on-one meetings with the mining bosses. He said the meeting would potentially slow down retrenchments and mine closures. However, the meeting would not get to the bottom of the challenges facing the sector, including debt, load shedding and labour unrest. “The mining companies are all too damaged, too sick, too dysfunctional – for just a couple of high level meetings to fix – let alone turn around,” Major said yesterday. TRANSNET TRANSNET HAILS UNION OF ICONIC BRANDS (Business Report, 9/9/2015) Transnet announced on Tuesday that it has appointed Sun International as the marketing partner for its iconic Blue Train. The partnership will see local and international tourists access some of the most popular tourist spots from Sun City in the North West to Table Bay in Cape Town using the iconic luxury train. “The partnership is a confluence of two iconic brands in the Blue Train and Sun International,” Transnet’s acting group chief executive officer, Siyabonga Gama, said at a media briefing in Pretoria to announce the partnership. Gama said the detailed nature of the partnership, including the amount to be invested, would be determined over the next few months. The partnership would involve recapitalisation and a possible upgrade and the acquisition of new trains, plus the possibility of new routes to increase the historic train’s footprint.

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GENERAL FITCH: DOWNGRADE RISK FOR SOUTH AFRICA'S SOVEREIGN RATING IS INCREASING (Engineering News, 9/9/2015) Ratings agency Fitch said on Tuesday the risk of a downgrade to South Africa's sovereign rating was increasing. In June, Fitch confirmed its BBB rating for South Africa with a negative outlook. "Since we put South Africa on a negative outlook in December 2014, the news flow has largely been negative," said Carmen Altenkirch, director at Fitch Ratings speaking at a conference in London. SWAZI FACES TRADE SANCTIONS - COULD IMPACT SA (Cargo Info Africa, 9/9/2015) Swaziland may face potentially crippling trade sanctions if it fails to get its political house in order, warned the European Union (EU). And such sanctions could affect South African companies and financial institutions as well, reports CNBC Africa. Under the African Growth and Opportunities Act (Agoa), Swaziland’s eligibility for duty-free trade access to the US was suspended last year. According to a blog on Swazi Media, the trade sanctions were a result of Swaziland King Mswati III’s poor record on human rights. Online community platform, Sahara Reporters, highlighted examples of this poor record which include the fact that criticism of the royal family is forbidden while labour and human rights groups cannot be legally registered in the country. A contributor to the platform wrote: “Political parties are banned and pro-democracy activists are charged as terrorists. Judges serve at the whim of King Mswati, resulting in a farcical judiciary that has never fully upheld a basic human right in its history.” The CNBC Africa report pointed out that refraining from addressing these concerns could cost Swaziland its export market for sugar, beef, citrus and other exports. CURRENCIES AND PRICES

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ALSI: 3 mnth to 8 Sep 15

(Mail & Guardian, 9/9/2015)

JSE AS AT 17:03PM 8 SEPTEMBER 2015

All Share Index 8/09 49,573

+ 726.44 + 1.49%

Industrials Index 8/09 43,500

+ 428.22 + 0.99%

Financials Index 8/09 42,717

+ 534.72 + 1.27%

Top 40 Index 8/09 44,107

+ 718.17 + 1.66%

Industrial 25 Index 8/09 64,202

+ 957.44 + 1.51%

Financial 15 Index 8/09 15,940

+ 233.38 + 1.49%

Resources 10 Index 8/09 35,451

+ 826.15 + 2.39%

Alt-X Index 8/09 1,483

+ 0.64 + 0.04%

WORLD INDICATORS

FOREX

Rand/Dollar 06:34 13.5951

- 0.35 - 2.51%

Rand/Pound

06:35 20.8871

- 0.40 - 1.89%

Rand/Euro 06:35 15.1832

- 0.40 - 2.58%

COMMODITIES

Gold (usd/oz) 06:33 1,124.03

+ 0.23 + 0.02%

Platinum (usd/oz)

06:33 1,008.32

+ 5.70 + 0.57%

Brent (usd/barrel) 06:33 49.75

+ 0.14 + 0.28%

WORLD MARKETS

Wall St (DJIA) 8/09 16,493

+ 390.30 + 2.42%

Germany (DAX)

8/09 10,271

+ 233.32 + 2.32%

Japan (Nikkei) 06:33 18,406

+ 545.39 + 3.05%

(Business Report, 9/9/2015)

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(TFR Commercial Management: Business Performance Dept)

Petrol/ Diesel Price

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

95 ULP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00

Diesel 0.05% (c/l) 997.49 895.49 969.49 1090.09 1085.09 1134.09 1138.09 1062.27 1008.27

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Diesel 0.005% (c/l) 1001.89 899.89 973.89 1096.49 1091.49 1137.49 1141.49 1067.67 1016.67

Illuminating Paraffin (c/l) 697.728 595.728 668.728 690.828 685.828 727.828 733.828 663.828 608.828

Liquefied Petroleum Gas

(c/kg) 1829.00 1679.00 1833.00 1918.00 1935.00 2035.00 2091.00 2002.00 1887.00

GAUTENG

93 LRP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00

93 ULP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00

95 ULP (c/l) 1124.00 1031.00 1127.00 1289.00 1289.00 1336.00 1377.00 1326.00 1257.00

Diesel 0.05% (c/l) 1028.09 926.09 1000.09 1122.79 1117.79 1166.79 1170.79 1094.97 1040.97

Diesel 0.005% (c/l) 1032.49 930.49 1004.49 1129.19 1124.19 1170.19 1174.19 1100.37 1049.37

Illuminating Paraffin (c/l) 747.928 645.928 718.928 743.828 738.828 780.828 786.828 716.828 661.828

Liquefied Petroleum Gas

(c/kg) 2011.00 1861.00 2015.00 2100.00 2117.00 2217.00 2273.00 2184.00 2069.00

YR2014

01-Jan-

14

05-Feb-

14

05-Mar-

14

02-Apr-

14

07-May-

14

04-Jun-

14

02-Jul-

14

06-Aug-

14

03-Sep-

14

01-Oct-

14

05-Nov-

14

03-Dec-

14

COASTAL

95 LRP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

95 ULP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

Diesel 0.05% (c/l) 1260.55 1284.75 1311.95 1299.15 1269.37 1245.79 1259.79 1254.17 1228.79 1215.79 1154.79 1101.49

Diesel 0.005% (c/l) 1263.95 1288.15 1316.35 1304.55 1274.77 1249.19 1263.19 1258.57 1234.19 1221.19 1161.19 1106.89

Illuminating Paraffin (c/l) 963.828 975.828 991.828 953.028 934.028 924.028 947.028 940.028 921.028 907.028 855.028 805.728

Liquefied Petroleum Gas

(c/kg) 2260.00 2314.00 2372.00 2350.00 2346.00 2319.00 2377.00 2365.00 2257.00 2269.00 2164.00 2039.00

GAUTENG

93 LRP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

93 ULP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

95 ULP (c/l) 1357.00 1396.00 1432.00 1439.00 1424.00 1402.00 1433.00 1433.00 1366.00 1361.00 1316.00 1247.00

Diesel 0.05% (c/l) 1287.15 1311.35 1338.55 1329.75 1299.97 1276.39 1290.39 1284.77 1259.39 1246.39 1185.39 1132.09

Diesel 0.005% (c/l) 1290.55 1314.75 1342.95 1335.15 1305.37 1279.79 1293.79 1289.17 1264.79 1251.79 1191.79 1137.49

Illuminating Paraffin (c/l) 1009.728 1021.728 1037.728 1003.228 984.228 974.228 997.228 990.228 971.228 957.228 905.228 855.928

Liquefied Petroleum Gas

(c/kg) 2442.00 2496.00 2554.00 2532.00 2528.00 2501.00 2559.00 2547.00 2439.00 2451.00 2346.00 2221.00

(SAPIA online)

Daily prices for 8 September 2015

LME Official Prices, US$ per tonne

Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

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Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1670.00 1593.00 5277.00 1670.00 9845.00 15490.00 1791.00 1655.00

Cash Seller & Settlement 1680.00 1593.50 5280.00 1670.50 9850.00 15500.00 1791.50 1660.00

3-months Buyer 1685.00 1614.50 5255.00 1683.00 9890.00 15200.00 1793.00 1680.00

3-months Seller 1695.00 1615.50 5256.00 1685.00 9895.00 15225.00 1794.00 1685.00

15-months Buyer 15040.00

15-months Seller 15090.00

Dec 3 Buyer 1802.00 5265.00 1760.00 9960.00 1855.00

Dec 3 Seller 1807.00 5275.00 1765.00 10060.00 1860.00

(London Metal Exchange, 9/9/2015)

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