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COMMODITY NEWSBRIEFS: 2 JUNE 2016

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Natasha.Havenga@transnet.net

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AUTOMOTIVE NEW-VEHICLE SALES SLOW DOWN DOMESTICALLY, BUT EXPORT MARKET SHOWS GROWTH (Engineering News, 2/6/2016) The National Association of Automobile Manufacturers of South Africa (Naamsa) on Wednesday said that aggregate new-vehicle sales in May declined to 42 907, figures which the organisation said were “uninspiring”. The new vehicle sales statistics for the month of May were released on Wednesday for public consumption on the website of the Department of Trade and Industry. According to stats, new vehicle sales fell from 47 832 vehicles sold in May last year, a decline of 4 925 vehicles, or a fall of 10.3%. Naamsa said the slow growth in the domestic new car market was expected to continue for the rest of the year, while sales in new vehicles for export picked up. “The balance of 2016 industry sales numbers [are] expected to remain under pressure as a result of subdued economic growth, double digit new vehicle price increases, the possibility of further interest rate hikes and ongoing challenges confronting consumers and businesses,” Naamsa said in the statement. Naamsa said the low demand for new cars domestically would lead to lower vehicle imports and the country’s export of new vehicles was expected to grow. In contrast, export sales for May were at 33 676 units, reflecting a gain of 262 vehicles, or an improvement of 0.8% compared to the 33 414 vehicles exported in the same month last year. This improvement, Naamsa said, was “marginal”. This trend was the same with domestic sales of new light commercial vehicles, bakkies and mini buses, which reflected a decline compared to the light commercial vehicles sold during the corresponding month last year. But Naamsa said it expected the momentum of new vehicle exports to improve over the balance of 2016 on the back of additional light commercial vehicle exports to Europe. INTERMODAL See article “TRANSNET INVITES PRIVATE SECTOR BIDS TO BUILD AND OPERATE NEW GAUTENG INLAND PORT” under heading TRANSNET INDUSTRIAL BARCLAYS PMI DROPS TO EXPECTED LEVELS IN MAY, AFTER ‘UNSUSTAINABLE’ APRIL SURGE (Engineering News, 2/6/2016) While the seasonally adjusted Barclays Purchasing Managers’ Index (PMI) backtracked somewhat, dropping some three points in May, the headline PMI remained above the neutral 50-point mark for the third consecutive month. The PMI fell from

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54.9 index points in April to 51.9 points in May – a level that was deemed more indicative of conditions in the sector and in line with the eurozone. The decline was “broadly in line” with expectations after recording an “unsustainable” level in April, said BNP Paribas economist Jeffrey Schultz. “The pull back in key manufacturing PMIs in May does not surprise us and paints a more accurate picture of the still relatively tentative state of the domestic manufacturing sector,” he noted. May recorded a decline in every major subcomponent, except suppliers’ performance index. “While we are encouraged at the four consecutive months that the PMI leading indicator – new sales order as a ratio of inventories – has been back above its expansionary level of one, weak underlying global and domestic demand, suppressed manufacturing production, a poor labour market and depressed levels of manufacturing business confidence continue to keep us cautious,” Schultz commented. Manufacturers faced renewed pressure on the cost front, the PMI showed, after the price index, which slipped to a four-month low in April, ticked back up to 80.1 in May, driven by the renewed weakness in the rand and oil prices. “This indicates a persistence of strong cost-push inflation pressures at the producer level and supports our view for both Producer Price Index and Consumer Price Index prices to pick up momentum again in the coming months,” Schultz added. GRAIN YELLOW CORN FALLS FROM RECORD AS RAND STRENGTHENS (Moneyweb, 2/6/2016) South African yellow-corn futures fell from a record while the white variety also dropped after international prices declined and the rand strengthened, reducing the cost of imports relative to locally produced grain. Yellow corn for delivery in July plummeted 2.6% to R3 769 ($241) a metric ton on the South African Futures Exchange in Johannesburg, falling from a record R3 880 reached yesterday. The white variety dropped 2% to R4 906 a ton, retreating a second day. Futures in Chicago declined 2.4% in past two days, the biggest decrease over such a period since May 4, while the rand has strengthened 0.9% in the period against the dollar. South African rainfall declined to the least since 1904 last year, damaging crops and raising prices. While the country on May 26 raised its local corn-output estimate 1.5% to 7.16 million metric tons this season from its April prediction, this would still be the smallest crop since 2008. The nation’s total corn deliveries dropped 27% to 889 760 tons by May 27, the fourth week of the season, from a year earlier, Pretoria-based South African Grain Information Service said in a statement on its website. TRANSNET TRANSNET INVITES PRIVATE SECTOR BIDS TO BUILD AND OPERATE NEW GAUTENG INLAND PORT (Engineering News, 2/6/2016) State-owned freight logistics utility Transnet has issued a request for proposals (RFP) inviting private logistics companies to design, build, operate, maintain and eventually hand over an inland container terminal, earmarked for Tambo-Springs, in eastern Gauteng. The 20-year concession would be Transnet’s biggest private sector participation project to date and would be located in Ekurhuleni along the N3 motorway and near to the Johannesburg-to-Durban rail corridor. The terminal is expected to be in operation by 2019 and will have an initial capacity of 144 000 twenty-foot equivalent units (TEUs) a year, with an option to increase its capacity to 560 000 TEUs. Transnet’s recently upgraded City Deep inland port, in Gauteng, has a yearly container handling capacity of 400 000 TEUs. The utility operates four other terminals in Gauteng and the new terminal has been designed to complement the existing container-handling capacity in the province. In fact, the Tambo-Springs terminal is one of three mega terminals being planned for South Africa’s smallest, yet wealthiest province over the coming 20 years. While no capital estimate has been provided, South Africa’s National Infrastructure Plan indicates that the project (designated as a Strategic Integrated Project 2 development) could involve an investment of around R6.5-billion. The project would include the development of terminal infrastructure, including an arrival and departure yard for cargo trains, and the installation of terminal equipment. It will include a stacking area, warehousing space, a distribution centre and inland Reefer facilities. Transnet Freight Rail would still be responsible for the operation of the arrival-and-departure yard, but the operator would be responsible for loading and offloading of containers and marketing of the facility. CURRENCIES AND PRICES

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JSE AS AT 17:00PM 1 JUNE 2016

All Share Index

1/06 53,518 - 0.72%

Industrials Index

1/06 44,716 + 1.23%

Financials Index

1/06 41,779 + 0.57%

Top 40 Index

1/06 47,510 - 0.97%

Industrial 25 Index

1/06 73,450 - 0.71%

Financial 15 Index

1/06 15,233 + 0.63%

Resources 10 Index

1/06 30,481 - 2.77%

Alt-X Index

1/06 1,489 + 0.03%

WORLD INDICATORS

FOREX

Rand/Dollar 06:15 15.6190 - 0.59%

Rand/Pound 06:25 22.5006

- 1.02%

Rand/Euro 06:25 17.4947 + 0.01%

COMMODITIES

Gold (usd/oz) 06:25 1,214.40 - 0.13%

Platinum (usd/oz) 05:46 972.00

- 0.21%

Brent (usd/barrel) 06:11 49.78 + 0.18%

WORLD MARKETS

Wall St (DJIA) 1/06 17,790 + 0.01%

Germany (DAX) 1/06 10,204

- 1.25%

Japan (Nikkei) 06:10 16,582 - 2.20%

3months

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(Business Report, 2/6/2016)

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Commodity Price ReportUPDATED 16 May 2016

Current (Spot)

Commodity Prices Feb-16 Mar-16 Apr-16 Q3 2015 Q4 2015 Q1 2016 2013 2014 2015

Manganese ore = (Mn 38% fob PE $/dmtu) 3.38 1.91 3.62 3.38 2.19 1.47 2.40 3.95 3.33 2.19

( 2010, 11, 12 Total average price for Manganese

source: Metalbulletin; New Sources = I - Net)

Iron Ore delivered to Qingdao China - 62%

Ferrous Content - USD/dry metric ton. Sources

= I - Net 66.24 49.62 53.75 66.24 55.31 45.46 48.36 136.17 94.39 54.65

Bituminous Coal : Rand/ton F.O.R. 310.0(e) 310.0(e) 310.0(e) 310.0(e) 309.67 333.67 310.0(e) 264.00 293.00 309.00

Source : South African Coal Report

Anthracite = R995/ton = January 2016 )

Coal Export Spot = $/ton FOB R/Bay

Sources: I-Net Richards Bay Coal Futures 52.80 51.70 53.15 52.80 53.60 50.92 51.80 80.5 71.68 56.75

China Chrome Ore 38 - 40% Cr CIF (ZA orig.)

(Source : Ryan's Notes) 113.44 92.50 92.50 113.44 171.00 155.00 97.83 181.33 182.99 169.00

FERRO-CHROME SPOT PRICE CIF ($/LB CR)

(FCRS) 0.82 0.92 0.92 0.82 1.08 1.00 0.92 1.16 1.19 1.06

(Source : I - Net)

Stainless Steel FOB NE $/Tonne 1 871.00 1 901.00 1 856.00 1 871.00 2 122.33 2 040.33 1 886.00 2 222.92 2342.00 2 213.08

Wheat (WEATN) R/TON 4 615.00 4 680.00 4 463.00 4 615.00 4 071.33 4 584.00 4 635.33 3 478.25 3775.00 4 092.67

White Maize (WMAZN) R/TON 4 408.00 5 035.00 4 720.00 4 408.00 3 145.67 3 728.33 4 920.00 2348.92 2212.00 3 044.33

Yellow Maize (YMAZN) R/TON 3 134.00 3 458.00 3 121.00 3 134.00 2 816.00 3 422.33 3 467.33 2 297.00 2215.00 2 751.08

Diesel - Gauteng (R/L) Litre 10.54 9.43 9.58 10.54 11.02 10.87 9.69 11.99 12.7 10.77

Petrol 95 ULP - Gauteng(R/L) Litre 12.62 12.43 11.74 12.62 13.20 12.47 12.18 12.92 13.84 12.41

Oil Brent Crude ($/Barrel) Litre 47.37 36.56 40.05 47.37 51.36 43.85 37.53 108.63 97.70 54.08

Steel:

HR coil (US $/ton) 435.00 355.00 390.00 435.00 386.67 335.00 365.00 590.63 593.33 403.92

CR coil (US $/ton) 560.00 475.00 530.00 560.00 465.00 432.50 475.00 689.38 668.33 488.75

HR coil (EU €/ton) 405.00 325.00 335.00 405.00 379.33 334.33 321.67 469.17 427.45 380.92

CR coil (EU €/ton) 510.00 430.00 443.00 510.00 472.67 446.67 432.67 557.08 514.64 472.33

Economic Indicators

CPI (Headline) 6.30 (e) 7.00 6.30 6.30 (e) 4.70 4.90 6.50 5.76 6.05 4.60

PPI (final manufactured goods) monthly = % 7.10 (e) 8.10 7.10 7.10 (e) 3.40 4.40 7.60 5.98 7.50 3.60

R/$ = 15.49 R/€ = 17.51, R/£ = 22.20

(commodity news, 16/05/2016) 14.57 15.77 15.33 14.57 13.00 14.21 15.80 9.64 10.84 12.75

TFR Commercial Management: Business Performance Department

Note: ( E = Estemate price - C = contract - Blue = acts)

Quarterly Yearly

(TFR Commercial Management: Business Performance Dept)

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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 1131.00 1214.00 1226.00

95 ULP (c/l) 1194.00 1200.00 1131.00 1214.00 1226.00

Diesel 0.05% (c/l) 972.47 910.47 925.47 1015.47 1014.47

Diesel 0.005% (c/l) 977.87 914.87 928.87 1020.87 1018.87

Illuminating Paraffin (c/l) 594.028 535.028 552.028 608.028 601.028

Liquefied Petroleum Gas (c/kg)

1892.00 1893.00 1773.00 1883.00 1877.00

GAUTENG

93 LRP (c/l) 1209.00 1215.00 1146.00 1232.00 1244.00

93 ULP (c/l) 1209.00 1215.00 1146.00 1232.00 1244.00

95 ULP (c/l) 1237.00 1243.00 1174.00 1262.00 1274.00

Diesel 0.05% (c/l) 1005.17 943.17 958.17 1053.87 1052.87

Diesel 0.005% (c/l) 1010.57 947.57 961.57 1059.27 1057.27

Illuminating Paraffin (c/l) 647.028 588.028 605.028 662.628 655.628

Liquefied Petroleum Gas (c/kg)

2074.00 2075.00 1955.00 2065.00 2060.00

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

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(SAPIA online)

Daily prices for 1 June 2016

LME Official Prices, US$ per tonne

Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1530.00 1543.50 4600.00 1673.50 8320.00 15900.00 1906.00 1649.00

Cash Seller & Settlement 1540.00 1544.00 4601.00 1674.00 8325.00 15905.00 1906.50 1651.00

3-months Buyer 1560.00 1556.00 4585.00 1678.00 8360.00 15850.00 1910.00 1680.00

3-months Seller 1570.00 1557.00 4586.00 1678.50 8365.00 15900.00 1911.00 1685.00

15-months Buyer 15590.00

15-months Seller 15640.00

Dec 1 Buyer 1620.00 1605.00 4585.00 1693.00 8475.00 1897.00 1795.00

Dec 1 Seller 1630.00 1610.00 4595.00 1698.00 8575.00 1902.00 1805.00

Dec 2 Buyer 1653.00 4595.00 1705.00 8580.00 1858.00

Dec 2 Seller 1658.00 4605.00 1710.00 8680.00 1863.00

Dec 3 Buyer 1700.00 4605.00 1735.00 8670.00 1833.00

Dec 3 Seller 1705.00 4615.00 1740.00 8770.00 1838.00

(London Metal Exchange, 2/6/2016)

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