Mizuho Securities of Japan: Intel data center chip share will continue to decline

South Africa's state-owned freight logistics group Transnet reported a R4.6 billion profit for the financial year ended March 31, 2026, its first annual profit in four years, reversing a R1.9 billion loss in the prior year. Revenue rose 7.1% to R88.6 billion, driven by higher rail and pipeline volumes together with weighted average tariff increases. Rail volumes, handled by Transnet's largest operating division, increased 4.9% to 167.9 million mt from 160.1 million mt a year earlier, while pipeline volumes grew 6.9% to 14.3 billion litres. EBITDA rose 0.7% to R30.9 billion, with the EBITDA margin narrowing 2.2 percentage points to 34.8%, and net operating expenses increased 10.8% to R57.7 billion. A substantial portion of the profit stemmed from a once-off transaction rather than operations. Transnet disposed of a 49.999% interest in the Durban Gateway Terminal to International Container Terminal Services Inc. for R10.5 billion, effective January 1, 2026, generating a R12.5 billion profit on disposal including a related fair value adjustment. Group CEO Michelle Phillips said the company still has a long way to go in its recovery, noting that rail volumes remain below the previously announced 180 million mt target, which she described as a prerequisite for the underlying business to break even. Borrowings rose to R150.7 billion, and capital investment totalled R23.3 billion during the year, with a further R129.1 billion planned over the next five years. The results carry relevance for South Africa's chrome sector, which depends on Transnet's rail and port network to move record chrome ore export volumes, and where rail and port logistics constraints have been repeatedly cited by industry bodies as a structural drag on ferroalloys competitiveness, forcing greater reliance on costlier road transport. Transnet also reported progress on opening its rail network to third-party operators, having concluded Rail Access Agreements with 11 train operating companies, with the first services expected to commence during the 2026/27 financial year. Transnet's results did not disclose chrome ore or ferroalloys-specific volumes within the rail or port figures, leaving the extent of any improvement in chrome-specific logistics performance unquantified.

Global mining infrastructure products provider Jennmar has entered into a long-term partnership with stainless steel producer Outokumpu Corporation to supply ground control products for the Kemi mine in Finland, the country's largest underground mine and Europe's only operational chrome mine. Jennmar has established a dedicated Jennmar Finland entity to streamline commercial transactions for Outokumpu and the mine's management teams. Under the multi-year agreement, Jennmar will supply a full range of ground support equipment tailored to Kemi's underground conditions, including roof bolts, cable bolts, mesh, steel accessories and pumpable resins. The company said it will draw on its global supply chain and technical expertise to support safety, stability and production efficiency at the operation, and will work with Kemi's mine management and underground technical teams on a structured change-management process aimed at optimising mining operations. Jennmar Europe president Mike Petkovich described Kemi as one of the largest and most impressive mining operations in Europe. The Kemi mine has an ore processing capacity of 2.7 million t/y and supplies the chrome feeding Outokumpu's ferrochrome and stainless steel production at Tornio in northern Finland, making it a rare example of a fully integrated mine-to-stainless chromium value chain operating within Europe. Outokumpu operates production sites across Finland, Germany, Sweden, the Netherlands, the United States and Mexico. The agreement underscores continued investment in the operational reliability of Europe's only domestic chrome ore source at a time when the region's ferrochrome producers face sustained competition from lower-cost imported material.

South Africa's mining production fell 7.5% year-on-year in July 2026, with ten of the country's twelve mining sectors recording declines, according to Statistics South Africa's latest Mining: Production and Sales release. Chromium ore was one of only two sectors to post growth, rising 13.7% year-on-year, alongside manganese ore at 4.9%. Platinum group metals were the largest negative contributor, with production down 13.5% and subtracting 3.2 percentage points from the headline figure. Coal production fell 7.5%, contributing -2 percentage points, while iron ore declined 8.1% for -1.3 percentage points. Diamonds recorded the steepest fall at 48.2%, with nickel down 18.8%, alongside weaker output in gold and copper. On a seasonally adjusted basis, mining production decreased 1.9% month-on-month in July, following a marginal 0.1% rise in June and a 5.6% decline in May. Chromium ore also stood out on the sales side. Mineral sales at current prices fell 5.6% year-on-year in July, with gold the largest negative contributor as sales declined 33.4%, subtracting 8.5 percentage points. Sales of other non-metallic minerals dropped 26% and nickel sales fell 51.7%. Against that, chromium ore sales rose 20%, contributing 1.6 percentage points and ranking as the largest positive contributor, with coal sales up 5% for a further 1 percentage point. Seasonally adjusted mineral sales at current prices fell 15.1% month-on-month in July, following a 2% increase in June. Stats SA Principal Survey Statistician Jean-Pierre Terblanche characterized the month as a significant year-on-year decline for the sector overall, with chromium ore and manganese the exceptions to an otherwise broad-based contraction.