Statistics South Africa (Stats SA) has reported that seasonally adjusted whole mining manufacturing declined by 0.6% month-on-month in Could. This follows a 0.8% month-on-month rise in April.
In degree phrases, Minerals Council South Africa notes, actual mining output stays effectively beneath the height up to now in 2024, attained in February. Due to this, and even assuming some restoration within the June output figures, mining manufacturing appears to be like set for a quarterly decline within the second quarter.
This follows a contraction of 4.7% quarter-on-quarter within the first quarter of this 12 months.
As well as, the Minerals Council factors out that whole mining manufacturing stays a notable 7.4% beneath its pre-Covid degree of December 2019.
“To place this poor efficiency into perspective, the extent of actual manufacturing manufacturing was 2.5% decrease in Could than throughout December 2019,” it says.
On a extra constructive word, for the primary 5 months of this 12 months, mining manufacturing elevated by 0.9% year-on-year. The Minerals Council reiterates that whole actual mining output declined by 7.2% in 2022 and by an additional 0.3% in 2023.
It explains that the improved year-on-year efficiency was supported by larger manufacturing of diamonds, whereas chrome output continues to “shoot the lights out”.
Contemplating the sustained absence of mining sector load curtailment in Could, the council says the month-to-month output decline could seem perplexing at first look.
When it comes to the bigger weighted subcomponents, gold manufacturing was down by 4.6% month-on-month, whereas output of platinum group metals (PGMs) declined by a big 11% month-on-month.
“Concerning the latter, that is most probably only a normalisation from an (unexpectedly) sturdy efficiency in April. The extent of output in Could aligns higher with the restructuring presently skilled within the PGM sector.
“With this in thoughts, we count on PGM output to stay subdued for the remainder of the 12 months. The absence of load curtailment and a supportive (excessive) gold worth implies that the month-on-month decline in gold manufacturing was extra of a shock. That mentioned, it does proceed a pattern noticed over a few years,” the council factors out.
Through the second quarter, the Minerals Council says, non-energy constraints appear to have outweighed the constructive impression of improved electrical energy provision on mining manufacturing.
These constraints embrace a sustained depressed PGM worth surroundings and ongoing logistical issues. Particularly, it says, State-owned Transnet’s rail and port woes stay a serious hindrance for the coal and iron-ore sectors.
Because it stands, the Minerals Council says mining manufacturing is projected to say no quarter-on-quarter within the second quarter, subtracting from actual GDP development.
“Nonetheless, based mostly on the incoming high-frequency information from the non-mining sectors, we count on general actual GDP to greater than get well within the second quarter from the 0.1% quarter-on-quarter contraction within the first quarter.”
