Coal exports are back on track – which is good news for volumes on the Saldanha railway line to the Northern Cape and the railway line between Richards Bay and the Highveld coal field.
“The Chinese have stopped mining coal in certain regions, so coal exports are back on. The bulk commodity side of rail is flying and there has been a recovery in iron ore prices as well, which is helping Saldanha,” economist Mike Schussler told delegates at a recent JCCI/FTW business breakfast on ‘Logistics in Africa' in Johannesburg.
China’s economy used to grow at about 11%, but was now growing at around 7%. “The growth in China is changing. There is still an uptake of commodities, but they are moving more into services. And the Chinese population is ageing rapidly because of its one-child policy,” he explained.
Schussler said South Africa had experienced a big implosion in its commodity prices, especially in dollar terms. “It’s come back up a bit, but it is nowhere near where it used to be.”
Still, according to him, the South African logistics sector at the moment is looking fairly strong. “I’m not sure how long this will last. It could be a while because the Chinese coal story will be with us for another six months or more.”
He cautioned that mining was likely to continue to struggle in the foreseeable future. “They are going to have to look at their costs a heck of a lot. Fortunately the sector didn’t implode and now there is a bit of a bounce back.”
He said emerging markets had outperformed advanced economies around the world for quite a while now, and were likely to continue to do so.
