SHANGHAI, Oct 11 (SMM) - The strike at South Africa’s port and freight-rail operator that’s curbing mineral exports has worsened as members of more labour unions join the protest.
The strike jointly organized by the majority labour group at state-owned Transnet SOC Ltd., and the United National Transport Union began on Oct. 6. The South African Transport and Allied Workers Union, the second-biggest employee group, and other smaller unions will also halt work from Monday, Cobus van Vuuren, Untu’s general secretary, said Sunday in an interview.
Transnet, which operates the nation's industrial ports, freight rail network and fuel pipelines, has declared force majeure on goods due to the labour action.
"Today, all ports and freight railways are not expected to be operational," Busi Mavuso, the chief executive officer of lobby group Business Leadership South Africa, said in a report on Monday. This is catastrophic not only for the obvious sectors linked to direct imports like the medical sector, and exports, like the mining sector, but to the entire, interconnected economy.
Protesters marched near Transnet’s facilities at the Cape Town port as police observed from a distance. Cranes appeared to be at a standstill at the container terminal while few trucks entered or exited the vicinity.
Kumba Iron Ore Ltd. said the disruption will affect its 120,000 tons a day of export sales. The company's output will be reduced by 50,000 tons a day for the first week of the strike and jump to 90,000 tons after that, according to a company statement.
Thungela Resources Ltd., South Africa’s biggest shipper of thermal coal, also said a prolonged two-week strike would reduce export production by as much as 300,000 tons. The exports of chrome, manganese and other bulk commodities will also be impacted.
According to SMM, under the influence of factors such as typhoons, floods, and insufficient port capacity, South African chrome ore exports have reduced the chrome ore exports in 2022. As such, the domestic supply of chrome ore continues to be tight and the chrome ore prices hit record high in 17 years. Recently, due to the severe pandemic situation in Tianjin, Inner Mongolia, and Shanxi, the transportation was prolonged, and the stability of raw material supply worsened. In the early stage, the ferrochrome factories mainly purchased in small amount as needed due to the high prices of chrome ore, hence the in-plant raw material inventory was relatively low. In order to remain production, the ferrochrome factories had more demand for chrome ore. At present, the strike at South Africa’s port and freight-rail has restricted the transportation in South Africa, which may further affect the supply of chrome ore in the future. Therefore, traders of chrome ore tend to hold the prices and are reluctant to sell. The prices of chrome ore from South Africa have increased. However, as the domestic ferrochrome factories have reduced the production, demand for chrome ore has weakened. In addition, there have been many strikes in South Africa in recent years. The impact of this strike on the domestic chrome market remains to be seen, and SMM will continue to pay attention in the later period.
