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COMMODITY NEWSBRIEFS: 4 NOVEMBER 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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FAST MOVING CONSUMER GOODS ILLOVO SUGAR TO BOOST OUTPUT AS DROUGHT SHOWS SIGNS OF ENDING (Moneyweb, 4/11/2015) Illovo Sugar, part-owned by Associated British Foods, will lift production by as much as 300 000 metric tons should South Africa’s worst drought since 1992 end, AB Foods chief executive officer George Weston said. “We need the drought to end,” Weston said in a presentation in London on Tuesday. “I think it probably has broken to some extent. That will put two or three hundred thousand tons, we hope, onto the volumes in South Africa and make a manifest difference.” Parts of the country’s KwaZulu-Natal province, where Illovo grows sugar, experienced heavy rainfall on Tuesday, according to the yr.no website, a joint service by Norwegian Meteorological Institute and the Norwegian Broadcasting Corporation. SA THE BIGGEST SOUTHERN HEMISPHERE FRUIT EXPORTERS (FTW, 4/11/2015) South Africa has retained its status as the biggest southern hemisphere exporter of fresh fruit, according to data revealed at the Southern Hemisphere Association of Fresh Fruit Exporters (SHAFFE) AGM in Atlanta last week. The data was based on the volume of fresh fruit sold by seven of the SHAFFE members. Since 2012 South Africa has held the title. The gap with the next in line (Chile) widened in 2014 as South Africa experienced a bumper year while Chilean crops suffered from climatic difficulties. Argentina also suffered the effects of South American climatic woes, as well as its own economic woes. Peru showed good growth along with New Zealand and Australia while Uruguay was off 2005 levels. INTERMODAL DEVELOPING COUNTRIES PAY UP TO 70% MORE FOR GOODS TRANSPORT (FTW, 4/11/2015) Developing countries, especially in Africa and Oceania, pay 40% to 70% more on average for the international transport of their imports than developed countries. This according to the United Nations Conference on Trade and Development’s (Unctad) Review of Maritime Transport 2015, released this month. The report highlights that the main reasons for this are to be found in these regions' trade imbalances, pending port and trade facilitation reforms, as well as lower trade volumes and shipping connectivity. Meanwhile, developing economies' share of world container port throughput increased marginally to approximately 71.9%. According to Unctad, this continues the trend of a gradual rise in developing countries' share of world container throughput.

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IRON KUMBA IN TALKS WITH DMR ON 21.4% RESIDUAL SISHEN MINING-RIGHT CONDITIONS (Engineering News, 4/11/2015) – Anglo American’s Kumba Iron Ore reported on Tuesday that it was considering the legal and practical implications of the conditions proposed by the Department of Mineral Resources (DMR) in relation to an amendment of the Sishen Iron Ore Company’s (SIOC’s) mining right. Kumba confirmed that it had received notice that the DMR’s director-general had consented to an amendment granting, with conditions, SIOC the residual 21.4% undivided share of the mining right for the Sishen mine, in the Northern Cape – SIOC already held 78.6% of the mine. The 21.4% share, initially held by ArcelorMittal South Africa, had been the subject of a long-running legal dispute, which arose in 2010 after the DMR controversially granted the right to a politically connected entity known as Imperial Crown Trading (ICT). In December 2013, the Constitutional Court ultimately ruled the residual 21.4% undivided share remained available for allocation by the DMR, but that based on the provisions of the Mineral and Petroleum Resources Development Act only SIOC could apply, which it subsequently did. Kumba told shareholders it was currently considering the terms of the consent to amend SIOC’s mining right, which was subject to a number of conditions, described by the DMR as “proposals”. “Once Kumba and SIOC have had an opportunity to engage fully with the DMR in this regard and to consider the precise meaning and scope of the proposed conditions, shareholders will be updated as appropriate,” the company said in a statement, adding that shareholders should exercise caution when trading in Kumba shares. Kumba spokesperson Nikki Wetzlar said that the talks between the DMR officials and senior Kumba executives were ongoing, but that she was unable to provide a timeframe for their conclusion. NON-FERROUS METALS ALUMINUM CLIMBS AS ALCOA SHRINKS CAPACITY ON CHINA EXPORT DELUGE (Mineweb, 4/11/2015) Aluminum advanced after Alcoa Inc., the largest U.S. producer, announced reductions in smelting and refining capacity, the latest response to a flood of Chinese exports that have created a global surplus and driven prices to the lowest level in more than six years. The metal used to make everything from aircraft to window frames and cans climbed as much as 1.5 percent to $1,516 a metric ton, the highest level in a week, after the New York- based company said it will reduce smelting capacity by 503,000 metric tons and alumina refining by 1.2 million tons. The measures will be completed by the end of next quarter. Prices have slumped 27 percent in the past year after Chinese shipments surged to a record as new low-cost capacity started in the world’s biggest supplier. Goldman Sachs Group Inc. says producers face the longest period of pain in a generation with increasing surpluses through 2018. Aluminum production will exceed demand by 1.13 million tons this year and by 832,000 tons in 2016, according to ICBC Standard Bank estimates before the latest Alcoa cuts. The metal’s advance may prove short-lived if history is any guide. Zinc has erased its gains after Glencore Plc announced 500,000 tons of production cuts on Oct. 9, while copper is hardly changed on levels before the company disclosed output reductions Sept. 7 to remove 400,000 tons from the market. LME copper traded little changed at $5,121.50 a ton by 3:41 p.m. on Tuesday. Nickel fell while zinc gained. Aluminum traded at $1,511. OTHER ZINC MINERS FAIL TO FOLLOW GLENCORE OUTPUT CUTS; PRICE SLIDES (Mining Weekly, 4/11/2015) Prices of zinc and lead have given up nearly all their gains since Glencore shocked the market with output cuts, as investors realised other producers were happy to fill the supply gap. That means the market is unlikely to see shortages of zinc and the price rally next year that many bulls had hoped for. The latest set-back in zinc prices follows disappointment this year as the well-flagged closures of big mines that had run out of ore failed to create shortages as expected amid large inventories. The benchmark zinc price on the London Metal Exchange (LME) surged 13% over two days in the aftermath of Glencore's announcements on slashing output. Commodity trader and producer Glencore, the world's largest miner of zinc ore, said on Oct. 9 it would cut 500 000 t of its zinc production or 4% of global supply to help support prices. Some investors hoped other producers would follow suit, but a few days after Glencore's statement, Indian rival Vedanta Resources said it had no plans to trim its zinc output since its mines had low costs. In September, Vedanta said it planned to produce one-million tonnes of refined zinc and lead in the current 2015/16 fiscal year to the end of March, up 15% from 869 069 t in the previous year.

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TRANSNET GE EXEC URGES SOUTH AFRICA TO BROADEN LOCALISATION ARCHITECTURE (Engineering News, 4/11/2015) Increasing local content in purchases by government departments and State-owned companies is viewed as a key pillar of South Africa’s reindustrialisation efforts. But the head of GE Transportation Africa, Thomas Konditi, believes the initiative could be augmented through the creation of a framework that incentivises multinationals to integrate South African products into global supply-chains not directly associated with a specific procurement programme. The American group is already considered a leader in delivering on localisation commitments, having steadily increased the South African content of the locomotives it has been supplying to Transnet Freight Rail (TFR) since 2009. Local-content commitments have risen from around 30% following TFR’s first order of 100 GE Class 43-000-type C30ACi diesel-electric locomotives six years ago, to over 55% when GE was awarded a R7-billion contract in early 2014 for supply of 233 Evolution Series GE ES40ACi locomotives. The most recent contract formed part of TFR’s larger R50-billion contract for the supply of 1 064 diesel and electric locomotives by 2018. The orders have been placed with four suppliers, including General Electric South Africa Technologies (GESAT), China South Rail Zhuzhou Electric Locomotive, Bombardier Transportation South Africa and China North Rail Rolling Stock South Africa. GESAT, comprising GE and the Mineworkers Investment Company was established in December 2008 as the empowered platform for the delivery of locomotives in South Africa. GESAT and Transnet have also entered into an export alliance, through which locomotives will be assembled in South Africa for export into the rest of Africa. Under the aegis of the alliance, ten GE C30ACi locomotives have been sold to Caminhos de Ferro de Moçambique, the Mozambican railways utility, while 16 have been leased to Thelo Rolling Stock for use by Vale, also in Mozambique. Work is also under way to create a customer innovation centre in Rosebank, Johannesburg, where young engineers and technicians will be put to work to adapt GE technologies and solutions to African conditions. The R500-million centre should be up and running by mid-2016. Nevertheless, Konditi believes South Africa’s localisation architecture could be broadened to manufacturing subsectors not directly associated with the locomotives order, arguing that the current prescriptive approach may not be delivering the best results. GE, he notes, may purchase $500-million in relation its South African contracts, but it buys $50-billion-a-year for its global supply chain. “If all you do is focus on what a multinational is doing in the country, you are limiting yourself by a factor of 100.” “Prescriptively I need to deliver a certain percentage of my contract in local procurement. Yet, GE buys 100 times that volume in its global supply chain. So instead of forcing the development of supplier X for contract Y, it should be possible to count anything you buy from an industrial supplier in South Africa for your global supply chain as a localisation credit.” Such an approach could offer South African manufacturers access to long-term sustainable contracts and facilitate an improvement in their global competitiveness. “South Africa’s supply-chain needs to be globally competitive if you want to be globally relevant,” Konditi avers. CURRENCIES AND PRICES

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ALSI: 3 mnth to 3 Nov 15

(Mail & Guardian, 4/11/2015)

JSE AS AT 17:00PM 3 NOVEMBER 2015

All Share Index 3/11 54,076

+ 215.81 + 0.40%

Industrials Index 3/11 45,919

+ 91.69 + 0.20%

Financials Index 3/11 45,634

- 147.00 - 0.32%

Top 40 Index 3/11 48,548

+ 198.69 + 0.41%

Industrial 25 Index 3/11 73,078

+ 317.42 + 0.44%

Financial 15 Index 3/11 16,990

- 93.16 - 0.55%

Resources 10 Index 3/11 33,618

+ 531.97 + 1.61%

Alt-X Index 3/11 1,527

+ 1.81 + 0.12%

WORLD INDICATORS

FOREX

Rand/Dollar 06:21 13.7667

- 0.01 - 0.09%

Rand/Pound

06:25 21.1885

- 0.04 - 0.17%

Rand/Euro 06:25 15.0679

- 0.11 - 0.75%

COMMODITIES

Gold (usd/oz) 06:24 1,121.95

- 12.45 - 1.10%

Platinum (usd/oz)

06:24 961.75

- 13.89 - 1.42%

Brent (usd/barrel) 06:24 50.47

+ 1.68 + 3.44%

WORLD MARKETS

Wall St (DJIA) 3/11 17,918

+ 89.39 + 0.50%

Germany (DAX)

3/11 10,951

+ 101.01 + 0.93%

Japan (Nikkei) 06:24 19,097

+ 414.11 + 2.22%

(Business Report, 4/11/2015)

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(TFR Commercial Management: Business Performance Dept)

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) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00

95 ULP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00

Diesel 0.05% (c/l) 997.49 895.49 969.49 1090.09 1085.09 1134.09 1138.09 1062.27 1008.27 1061.27

Diesel 0.005% (c/l) 1001.89 899.89 973.89 1096.49 1091.49 1137.49 1141.49 1067.67 1016.67 1067.67

Illuminating Paraffin (c/l) 697.728 595.728 668.728 690.828 685.828 727.828 733.828 663.828 608.828 658.828

Liquefied Petroleum Gas

(c/kg) 1829.00 1679.00 1833.00 1918.00 1935.00 2035.00 2091.00 2002.00 1887.00 1898.00

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GAUTENG

93 LRP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00

93 ULP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00

95 ULP (c/l) 1124.00 1031.00 1127.00 1289.00 1289.00 1336.00 1377.00 1326.00 1257.00 1261.00

Diesel 0.05% (c/l) 1028.09 926.09 1000.09 1122.79 1117.79 1166.79 1170.79 1094.97 1040.97 1093.97

Diesel 0.005% (c/l) 1032.49 930.49 1004.49 1129.19 1124.19 1170.19 1174.19 1100.37 1049.37 1100.37

Illuminating Paraffin (c/l) 747.928 645.928 718.928 743.828 738.828 780.828 786.828 716.828 661.828 711.828

Liquefied Petroleum Gas

(c/kg) 2011.00 1861.00 2015.00 2100.00 2117.00 2217.00 2273.00 2184.00 2069.00 2080.00

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 November 2015

LME Official Prices, US$ per tonne

Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1580.00 1469.50 5148.50 1670.50 9990.00 14990.00 1653.00 1665.00

Cash Seller & Settlement 1590.00 1470.00 5149.00 1671.00 9995.00 14995.00 1654.00 1675.00

3-months Buyer 1595.00 1500.00 5127.00 1686.50 10030.00 14975.00 1680.00 1690.00

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Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

3-months Seller 1605.00 1500.50 5127.50 1687.50 10050.00 15000.00 1682.00 1700.00

Dec 1 Buyer 1595.00 1537.00 5100.00 1717.00 10065.00 1720.00 1740.00

Dec 1 Seller 1605.00 1542.00 5110.00 1722.00 10165.00 1725.00 1750.00

15-months Buyer 14845.00

15-months Seller 14895.00

Dec 2 Buyer 1595.00 5085.00 1750.00 10150.00 1747.00

Dec 2 Seller 1600.00 5095.00 1755.00 10250.00 1752.00

Dec 3 Buyer 1662.00 5080.00 1770.00 10190.00 1762.00

Dec 3 Seller 1667.00 5090.00 1775.00 10290.00 1767.00

(London Metal Exchange, 4/11/2015)

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