Lower commodity prices put pressure on rates

Lower commodity prices and optimism that private operators will improve South Africa’s rail system are putting pressure on road hauliers to contain or reduce costs. Rail is preferred due to lower costs and logistics chain carbon emissions. Transnet has responded by introducing the Manganese Export Capacity Allocation (MDCA3), which guarantees rail space and port capacity to producers. By mid-2025, the former state rail monopoly had signed two separate 10-year contracts, one with the country’s fourth-largest producer, United Manganese of Kalahari (UMK), and the second with the Hotazel Manganese Mines (HMM) consortium. BMI Country Risk and Industry Research predicts that many commodities will remain under pressure into 2026. “Overall, throughout January- July, commodity prices have been rocked by tariff uncertainty, geopolitical tensions in the Middle East and between the US and its trading partners, and a weaker yet volatile US dollar amid Fed policy uncertainty,” BMI states. Earlier predictions of lower commodity prices through 2025 proved to be wrong. Jim Wiederhold, commodity indices product manager at Bloomberg, points out that, while industrial metals and grains finished the second quarter of the year down slightly, industrial metals were still up 8% for 2025. “Copper has driven most of the positive performance on the back of positive tailwinds of increasing use in global energy transition technologies. “Grains were the worst- performing sector in 2025, down 5% amid ample crops and shifting global demand. Grain prices have been on a steady decline since the price spikes of 2022 and are near cost-of- production lows,” he states. The remainder of the year will see whether World Bank predictions that commodity prices will fall by about 12% overall are accurate or not. “Risks to the commodity price projections are tilted to the downside. A sharper-than- expected slowdown in global growth could further depress commodity demand, especially for industrial products,” states the World Bank 2025 Commodity Markets Outlook. Bulk shipping rates are also under pressure due to a combination of lower volumes and growth in the global fleet. According to Howe Robinson Partners, 278 dry bulk vessels, equivalent to 18.34m dwt, were delivered into the fleet during the first half of 2025. Scrapping activity was subdued, leading to a 1.54% increase in the global fleet. ER