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COMMODITY NEWSBRIEFS: 4 FEBRUARY 2015 Please note that these articles are available in electronic format and can be requested and delivered via e-Mail.

(http://intra.spoornet.co.za) Natasha.Havenga@transnet.net

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INTERMODAL NEW PORT SYSTEM WILL PROVIDE CENTRAL INFORMATION HUB (FTW, 6/2/2015) Transnet National Ports Authority (TNPA) is gearing up to roll out a new port management system that will integrate ports across the country, significantly improving service delivery. The test phase of the new Integrated Port Management System (IPMS) will kick off at the Port of Durban on March 31, with the Port of Cape Town having been identified as the second port for implementation. According to Cape Town port spokesman Babalwa Stamper, the system is aimed at improving the efficiency of the country’s ports through an integrated system that enables all stakeholders across the supply chain beyond the ports’ authority to share information with each other. FUEL FUEL PRICE BONANZA NOT ALL IT SEEMS, WARNS ECONOMIST (Engineering News, 4/2/2015) Oil prices could bounce back to $65, $70 a barrel, with the price already strengthening in February to above $50 a barrel, said Econometrix director and chief economist Dr Azar Jammine on Tuesday. Speaking at a breakfast meeting in Pretoria, hosted by Ford, he said collapsing oil prices had seen the cost of domestic fuel come down by around 30% from a year ago. “But it’s not going to stay that way,” he warned. “The petrol price will go up by 40c, 50c next month. So enjoy February and the low prices for the moment.” While falling oil prices aided in bringing down inflation and putting more money into consumers’ pockets, it also had a negative impact, noted Jammine. In 2014, South Africa’s oil imports were up 16.2%, while mineral exports were down 0.5%.Oil was not the only commodity facing difficulty, said Jammine, with global demand for other commodities, such as iron-ore, mined in South Africa, also depressed. “As much as we are benefiting from oil prices, we are losing out because other mineral prices are also low. It’s not a one-way street.” Also, many African economies, such as Nigeria and Angola, were dependent on oil exports, and a slowing regional economy would be negative for South African exports, he said. COAL WATERBERG COAL PROJECT ON HOLD (Business Report, 4/2/2105) Work on the Eskom project in terms of optimisation and continuing value engineering was on hold until further direction was received from Eskom, Firestone Energy said yesterday. The company is a participant in the Waterberg coal project (WCP)

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joint venture. Waterberg Coal bought 480 million Firestone Energy shares in April 2013. Australia-based Waterberg said yesterday that, in terms of advancing the status of negotiations with respect to the coal supply agreement, Eskom had increased the term of its offtake agreement with Waterberg Coal to 40 years from 30 years. “It is expected that discussions in this respect will resume in the March quarter 2015,” the company said. In 2012, the WCP joint venture agreed to supply Eskom with 10 million tons of coal a year. During the quarter, work continued on a viability study for the export project, to be located in the south of the WCP area. The export project anticipated the build up to 4 million tons per annum (in saleable product) over a six-year period, with the first coal product forecast for the second quarter of 2016, the company said. According to the quarterly report, the project has identified coal resources of 3.883 billion tons of coal contained within the granted mining rights, of which 2.07 billion tons are contained within the measured category. The JSE-listed company said it hoped to sign a contract soon with RBT Grindrod Terminals, regarding port allocation at the Richards Bay Coal Terminal for confirmation of their capacity for the handling and loading of the project’s coal. It said negotiations were proceeding on the final volumes, timeline and contracted price. According to the report, access to water discussions at the Lephalalele Municipality were at an advanced stage. Sekoko Coal had received confirmation from the municipality that an in-principle agreement had been reached for it to be awarded the right to utilise all treated water. TRANSNET DISRUPTIONS ‘UNLIKELY’ AS TRANSNET WAGE TALKS KICK OFF (FTW, 4/2/2015) Transnet’s bi-annual wage negotiations are set to kick off early in February. “Port users are advised to be aware and to expect an increased number of union meetings taking place as wage negotiations kick off. We don’t foresee any problems or disruptions to service,” said a spokesman for the Port of Cape Town. Transnet has seen some major labour unrest in the past few years with massive strikes bringing port operations to a halt in some cases. According to Mike Walwyn, spokesman for the Port Liaison Forum, disruptions are unusual during the initial stages of wage negotiations. “The process usually runs very smoothly but it is imperative for the industry to keep track of the process and to monitor it as there can be problems when negotiations break down or terms are not met.” GENERAL SA RAPIDLY APPROACHING FISCAL CLIFF – EXPERT (News24, 4/2/2015) The fiscal cliff is rapidly approaching for the South African government, according to Frans Cronjé, CEO of the SA Institute of Race Relations (IRR). Cronjé said that the only way SA can get out of this threat would be through policy reform that opens the country to attract investments - both domestic and foreign - to drive growth and create jobs to see revenue pick up quicker. A Fast Facts report released by the IRR found that, despite taking a larger and larger chunk of the proceeds of South Africans, the government is running out of money. This report reviewed SA’s revenue base and found that government revenue as a proportion of gross domestic product (GDP) rose steadily in the latter apartheid years, from 19.6% in 1976/1977 to 23.35 in 1990/1991. The figure then flattened out through the 1990s and into the early 2000s, sitting at 23% in 2004, for example. However, the past decade has seen a rapid increase and by 2015/2016 it is anticipated that government revenue will account for 29.7% of GDP. "Yet, what the government is collecting is not nearly enough. Its budget deficits are on a par with what the apartheid government faced after the 1976 uprising," said Cronjé. ADDITIONAL TAXES ARE IN THE PIPELINE (Business Report, 4/2/2015) The government may decide to impose a R12 billion additional tax to reduce next year’s budget deficit from the fuel levy and impose significant tax increases for the wealthy, economists say. This would result in inflation not declining to the extent anticipated and offset the benefits of the recent petrol price declines. In his medium-term budget policy statement in October, Nene said a national appropriation of R1.2 trillion for 2015/16 was proposed, rising to R1.3 trillion in 2016/17. He proposed measures to reduce the budget deficit, stabilise public debt and ensure sustainability of critical social programmes. Nene said details of these measures would be provided in the 2015 Budget Review. South Africa is being monitored by rating agencies for an overall healthier fiscal policy, a reduced deficit, and an improved economic position. Johan Els, a senior economist at Old Mutual Investment Group, said government would seek to raise additional revenue to the tune of R44bn over the next three years, with possible avenues for this including raising the individual income tax marginal rate, capital gains and dividends tax and increasing the fuel levy and the VAT rate.

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CURRENCIES AND PRICES

ALSI: 3 month to 3 Feb 15

(Mail & Guardian, 4/2/2015)

JSE AS AT 17:00PM 3 FEBRUARY 2015

All Share Index 3/02 51,949

+ 554.78 + 1.08%

Industrials Index 3/02 47,804

- 47.25 - 0.10%

Financials Index 3/02 43,060

+ 557.33 + 1.31%

Top 40 Index 3/02 45,709

+ 520.35 + 1.15%

Industrial 25 Index 3/02 64,184

+ 37.00 + 0.06%

Financial 15 Index 3/02 16,468

+ 273.73 + 1.69%

Resources 10 Index 3/02 44,840

+ 1,694.49 + 3.93%

Alt-X Index 3/02 1,544

+ 19.61 + 1.29%

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WORLD INDICATORS

FOREX

Rand/Dollar 06:12 11.3813

- 0.12 - 1.00%

Rand/Pound

06:15 17.2161

- 0.03 - 0.19%

Rand/Euro 06:15 13.0471

+ 0.02 + 0.14%

COMMODITIES

Gold (usd/oz) 06:09 1,262.80

- 12.00 - 0.94%

Platinum (usd/oz)

06:09 1,238.88

+ 10.88 + 0.89%

Brent (usd/barrel) 06:12 57.40

+ 2.65 + 4.84%

WORLD MARKETS

Wall St (DJIA) 3/02 17,666

+ 305.36 + 1.76%

Germany (DAX)

3/02 10,891

+ 196.63 + 1.84%

Japan (Nikkei) 06:12 17,711

+ 152.79 + 0.87%

(Business Report, 4/2/2015) COPPER A – SETTLEMENT PRICE – 5695 FORWARD RATES - Dollar/rand 4pm close: R11, 43

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Petrol/ Diesel Price

YR2015

07-Jan-

15

04-Feb-

15

04-Mar-

15

01-Apr-

15

06-May-

15

03-Jun-

15

01-Jul-

15

05-Aug-

15

02-Sep-

15

07-Oct-

15

04-Nov-

15

02-Dec-

15

COASTAL

95 LRP (c/l) 1083.00

95 ULP (c/l) 1083.00

Diesel 0.05% (c/l) 997.49

Diesel 0.005% (c/l) 1001.89

Illuminating Paraffin (c/l) 697.728

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Liquefied Petroleum Gas

(c/kg) 1829.00

GAUTENG

93 LRP (c/l) 1102.00

93 ULP (c/l) 1102.00

95 ULP (c/l) 1124.00

Diesel 0.05% (c/l) 1028.09

Diesel 0.005% (c/l) 1032.49

Illuminating Paraffin (c/l) 747.928

Liquefied Petroleum Gas

(c/kg) 2011.00

YR2014

01-Jan-

14

05-Feb-

14

05-Mar-

14

02-Apr-

14

07-May-

14

04-Jun-

14

02-Jul-

14

06-Aug-

14

03-Sep-

14

01-Oct-

14

05-Nov-

14

03-Dec-

14

COASTAL

95 LRP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

95 ULP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

Diesel 0.05% (c/l) 1260.55 1284.75 1311.95 1299.15 1269.37 1245.79 1259.79 1254.17 1228.79 1215.79 1154.79 1101.49

Diesel 0.005% (c/l) 1263.95 1288.15 1316.35 1304.55 1274.77 1249.19 1263.19 1258.57 1234.19 1221.19 1161.19 1106.89

Illuminating Paraffin (c/l) 963.828 975.828 991.828 953.028 934.028 924.028 947.028 940.028 921.028 907.028 855.028 805.728

Liquefied Petroleum Gas

(c/kg) 2260.00 2314.00 2372.00 2350.00 2346.00 2319.00 2377.00 2365.00 2257.00 2269.00 2164.00 2039.00

GAUTENG

93 LRP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

93 ULP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

95 ULP (c/l) 1357.00 1396.00 1432.00 1439.00 1424.00 1402.00 1433.00 1433.00 1366.00 1361.00 1316.00 1247.00

Diesel 0.05% (c/l) 1287.15 1311.35 1338.55 1329.75 1299.97 1276.39 1290.39 1284.77 1259.39 1246.39 1185.39 1132.09

Diesel 0.005% (c/l) 1290.55 1314.75 1342.95 1335.15 1305.37 1279.79 1293.79 1289.17 1264.79 1251.79 1191.79 1137.49

Illuminating Paraffin (c/l) 1009.728 1021.728 1037.728 1003.228 984.228 974.228 997.228 990.228 971.228 957.228 905.228 855.928

Liquefied Petroleum Gas

(c/kg) 2442.00 2496.00 2554.00 2532.00 2528.00 2501.00 2559.00 2547.00 2439.00 2451.00 2346.00 2221.00

(SAPIA online)

Daily prices for 3 February 2015

LME Official Prices, US$ per tonne

Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1830.00 1869.50 5690.00 1847.00 15370.00 18925.00 2145.50 1925.00

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Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Seller & Settlement 1840.00 1870.00 5695.00 1848.00 15375.00 18950.00 2146.50 1926.00

3-months Buyer 1840.00 1888.50 5669.50 1861.00 15375.00 18975.00 2152.00 1940.00

3-months Seller 1850.00 1889.50 5670.00 1862.00 15400.00 19000.00 2153.00 1950.00

15-months Buyer 19010.00

15-months Seller 19060.00

Dec 1 Buyer 1840.00 1945.00 5625.00 1898.00 15455.00 2178.00 2005.00

Dec 1 Seller 1850.00 1950.00 5635.00 1903.00 15555.00 2183.00 2015.00

Dec 2 Buyer 1985.00 5610.00 1923.00 15405.00 2163.00

Dec 2 Seller 1990.00 5620.00 1928.00 15505.00 2168.00

Dec 3 Buyer 2030.00 5595.00 1923.00 15355.00 2150.00

Dec 3 Seller 2035.00 5605.00 1928.00 15455.00 2155.00

(London Metal Exchange, 4/2/2015)

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