Firming commodities provide bullish outlook

While stronger
commodity
markets have
impacted
positively on the local shipping
industry, it’s not all plain
sailing.
Freight logistics and shipping
services provider Grindrod
says firm commodity markets
have meant volumes handled
in the country’s dry-bulk
terminals have increased 62%
compared to the same period
last year. It adds that capacity
in the Matola and Richards
Bay dry-bulk terminals is fully
contracted for the remainder of
this year.
The company says dry-bulk
shipping rates have increased,
due to steadily increasing
dry-bulk commodity demand,
continued vessel scrapping and
a slow-down in newbuilding
deliveries. It adds that stronger
mineral commodity exports
and improved shipping markets
have created a bullish outlook
for the second half of the year.
South Africa’s bulk export
volumes rose 34.5% yearon-
year in July, according
to Transnet National Ports
Authority (TNPA).
July saw bulk exports rise to
15.6 million tonnes, bringing
the increase for the first seven
months of 2017 to 8.7%. Bulk
exports from Richards Bay
increased 36.3% in the same
month to 8.4-million tonnes,
while bulk exports from
Saldanha rose 23.6% to
5.3 million metric tonnes.
Meanwhile, International
Monetary Fund (IMF) chief
economist, Maurice Obstfeld,
believes global growth is
gaining momentum. The IMF’s
latest World Economic Outlook
projects global growth of 3.5%
in 2017 and 3.6 % in 2018.
But while the IMF says
commodity prices have firmed
since early 2016, it says the
prices have been at modest
levels. “Many commodity
exporters remain challenged,
notably in the Middle East,
Africa and Latin America,” says
Obstfeld.
“At the same time, a
combination of adverse weather
conditions and civil unrest
continue to threaten several
low-income countries with
mass starvation.”
The IMF says sub-Saharan
Africa’s short-term outlook
remains challenging.
“Growth is projected to
rise in 2017 and 2018, but
will barely return to positive
territory in per capita terms
this year for the region as
a whole, and will remain
negative for about a third of the
countries in the region,” it says.
“The slight upward revision
to 2017 growth relative to the
April 2017 WEO forecast,
reflects a modest upgrading
of growth prospects for South
Africa, which is experiencing
a bumper crop due to better
rainfall and an increase in
mining output, prompted
by a moderate rebound in
commodity prices.”