Boosted by signs of a supercycle of new commodity prices, South African mineral sales have achieved new record levels in the first two months of the year and continue to move to higher gear.
After the disastrous start of 2018, when mineral sales fell 3.2% year-on-year in January and February, the country’s mining fortunes changed dramatically, rising 14.4% and 20.8%. The first two months of 2019 and 2020, respectively. The local mining sector clearly ignored the “pandemic year.”
So far this year, mineral sales have been more rampant, more than 25% above 2020. An overview of the 120 billion rants of mineral sales in January and February is equal to the total production of the agricultural sector in 2020.
The direct result of Sterling’s performance in the mining sector is a stunning cumulative trade surplus in January and February, or over 41 billion rants. An indirect result that has a significant impact on the future direction of monetary policy is the impact on the value of the Rand’s exchange rate.
Exporters are probably dissatisfied with the sustained (albeit fluctuating) rise in the Rand / US dollar exchange rate since April 2020, while importers and consumers have restrained inflation and the Reserve Bank’s It is below the lower limit of the target and is enjoying field day. February Consumer Price Index (CPI) range.
A strong land, which also assumes a recent measure of stability, essentially eliminates concerns about rising repo rates (and, speculation, overdraft rates). This is good news for consumers, companies that want to grow. Capacity and venture capitalist.
Ultimately, it also benefits job creation and expansion of the tax base. Therefore, South African Revenue Service executives will be most pleased with the way mineral sales have reached the New Year.
A feature of the composition of mineral sales in January and February is a further change to the “Big-4” ranking. Three years ago, coal and gold were first and second, respectively, and platinum and iron ore were third and fourth, respectively.
These two groups are currently being switched, with platinum group metals and iron ore occupying first and second place. The manganese ranking is stable at 5th place, followed by chromium and nickel.
Global growth gains traction
The recovery in the global economy is clearly gaining momentum, with the International Monetary Fund recently raising its 2021 global growth forecast from 5.5% to 6%, stating that stronger recovery prospects continue to emerge. I will. The United States and China, the world’s two largest economies, are expected to grow by 6.4% and 8.4% in 2021, respectively.
The UK and India, the world’s fifth and sixth largest economies, are projected to grow at 5.3% and 12.5%, respectively, while South Africa’s growth forecast has been upgraded to 3.1%.
Substantial fiscal, financial, financial support, mass vaccination advances, health protocol enforcement, and e-commerce to fast-forward mode all contribute to a V-shaped economic recovery in most countries.
Strong demand for South African minerals is likely to continue and will usher in a sound measure of currency stability and balance of payments.
Dr. Roelof Botha is an economic advisor to the Optimum Group.
Mineral sales continue to break records
Source link Mineral sales continue to break records