BMI View: South Africa's metals industry will face the continued prospect of s ubdued refined metal prices , elevated energy costs , and labour unrest , limiting the industry's investment and growth prospects . Nevertheless, modest multi-year consumption growth for metals will be driven by the country's automotive, construction, and infrastructure sectors.
Following subdued economic growth in 2014, we forecast stronger metals demand fundamentals in 2015. Lower oil prices will benefit private consumption and investment, leading to our upward revision for South African real GDP growth from 2.1% to 2.5%. While automotive production is likely to remain weak in 2015 following significant production declines in 2014, we forecast stronger industry fundamentals in 2016-2019, supporting demand for steel, aluminium, and nickel. More broadly, we forecast average real GDP growth of 2.7% in 2015-2019, with the construction and infrastructure industries seeing average annual growth of 3.9% and 4.0%, respectively over the same period.
| Better Outlook Ahead |
|South Africa - Real GDP Growth & Sector Indicators|
| e/f = BMI estimate/forecast. Source: National Sources/BMI |
We expect metals production to see more pronounced headwinds compared to consumption due to consistent labour unrest in the mining sector and long-term structural problems such as high electricity prices. Furthermore, a national carbon tax, which was recently delayed but now set to go into effect in 2016, will also be detrimental to investment in productive capacity. Although concessions will potentially be implemented for energy-intensive industries such as steel production, the tax will further weigh on a deteriorating environment for metals production in South Africa.
| Far From Peak |
|South Africa - Crude Steel Production|
| f = BMI forecast. Source: World Steel Association |
The South Africa Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by BMI Research's macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in South Africa.
BMI's South Africa Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in South Africa.
- Benchmark BMI's independent metals industry forecasts for South Africa to test other views - a key input for successful budgeting and strategic business planning in the South Africa metals market.
- Target business opportunities and risks in South Africa through our reviews of latest industry trends, regulatory changes and major projects and investments.
- Exploit the latest competitive intelligence and company profiles on your competitors and peers.
BMI Industry View
A comprehensive summary of the impact and implications of the latest regulatory developments and key forecast indicators covering metals production, consumption and upside/downside risks to our outlook. The Metals SWOT analysis outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Steel: Steel production & consumption (‘000 tonnes).
- Aluminium: Aluminium consumption production & balance (‘000 tonnes).
- Copper: Refined copper production & consumption (‘000 tonnes).
- Zinc: Refined zinc production & consumption (‘000 tonnes).
- Lead: Refined Lead production, consumption & balance (‘000 tonnes).
- Nickel: Refined nickel production & consumption (‘000 tonnes).
- Tin: Refined tin production, consumption & balance (‘000 tonnes).
Details of the industry regulatory framework, relevant key legislation and environmental standards that impact the metals industry. The regulatory developments section provides analysis of the overall regulatory burden, the tax regime (including income tax rates), bureaucratic framework, corruption and a country specific political overview. Details of the industry regulatory framework provide information on relevant key legislation and regulations that will impact the metals industry.
Provides in depth coverage and forecasting of steel prices and includes BMI’s core view of what to expect in upcoming months. Within the monthly metals update, BMI provides performance data and key forecasts for select commodities, including prices for aluminium, copper, gold, iron ore, lead, nickel, palladium, platinum, silver, steel (MEPS Carbon Steel), tin and zinc.
The competitive landscape section provides comparative company analyses of detailed financial data for key listed metals firms, ranked in order of market cap (USDmn).
Examines the competitive position and short to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects. Details of products and services provide a full overview of each company’s operations.
The Metals Reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.