South Africa Metals Report Q3 2014

Date: May 7, 2014
Pages: 58
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: S946A7403D8EN

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Includes 3 FREE quarterly updates

BMI View: We see continued trouble on the horizon for South Africa's metals industry, which is increasingly beset by low output prices, rising energy costs, and further organized labour action. Metals consumption growth will rise faster than production growth, due to solid demand growth from the autos sector. Due to production weakness, we expect increased imports in the coming quarters, as investment in South African production facilities will be held back by the glut of metals, particularly steel, on the world market.

We expect metals consumption will track broader economic growth in South Africa, which we anticipate to be slow but steady with a modest recovery expected over coming years. We see autos production growth, which we currently forecast at 2.9% on average per annum from 2014 through 2018, as a key driver of metals consumption. Our forecast for the construction and infrastructure industries to see average annual growth of 3.9% and 3.7%, respectively, over the same period should also support the domestic metals industry.
BMI Industry View
Metals SWOT
Industry Forecast
Steel: Little Incentive To Invest
Production Outlook Muted
  Table: South Africa - Major Steel Plants
Consumption Fundamentals Appear Stronger
Construction Looking More Positive, Though Problems Remain
  Table: South Africa - Steel Consumption & Production
  Table: South Africa - Steel Production & Trade Historical Data ('000 tonnes, unless stated otherwise)
Aluminium: Diminishing As An Export Hub
Consumption Supported By Autos And Construction
Production Hampered By Power Woes
Upstream Supplies May Pose Challenge
Exports Likely To Decline
  Table: South Africa - Primary Aluminium Production, Consumption & Balance ('000 tonnes, unless stated otherwise)
Nickel: Declining Platinum Output To Constrain Nickel
Automotive Sector Remains Primary Demand Driver
Production Fundamentals Lag Demand
  Table: South Africa - Refined Nickel Production, Consumption & Balance
Regulatory Development
Carbon Tax Delayed, Though Implementation Likely
Labour Market To Remain Volatile
Tax Regime
  Table: South Africa - Political Overview
Commodities Forecast
Commodity Strategy
Iron Ore: Chinese Stimulus Not A Game Changer
Steel: Gradual Rationalisation Insufficient To Boost Prices
Aluminium: Recent Rally Unlikely To Persist Into H214
Copper: Bearish Forecast Appears Well Placed
Lead: Picking Up Autos Sector Tailwinds
Nickel: Recent Rise To Fall Back In H214
Zinc: Potential Test Of Resistance In Coming Weeks
  Table: Select Commodities - Performance & BMI Forecasts
Steel Price Forecast
  Table: BMI Steel Forecast
Short-Term Outlook
Core View
Global Steel Glut To Persist
Production: Rationalisation In The Long Term
Consumption: Growth Decelerating
Excessive Chinese Exports
Growing Arbitrage Between East & West
Risks To Price Outlook
  Table: Steel Data & Forecasts
  Table: Global Steel Prices By Region & Product, US$/tonne (ave)
Competitive Landscape
  Table: South Africa - Major Steel Production Facilities
  Table: South Africa - Select Listed Metals Producers
Company Profile
Company Overview
Company Strategy
Latest Financial Results
Company Details
Financial Data
  Table: ArcelorMittal - Key Financial Data
Cross Checks
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