8th November 2023
Impala Platinum Initiates Layoffs
Johannesburg-based mining company Impala Platinum is initiating voluntary job cuts at its deep South African platinum mines in response to declining metal prices, particularly in palladium. The precise extent of job reductions and cost savings has not been disclosed. Company spokesperson Johan Theron emphasized the necessity to reduce costs, stating, "We are obviously doing everything to reduce costs. Labour is a big cost component so you always start with labor by offering voluntary separation packages." Long-term concern arises from the growth of the electric vehicle market, which threatens the demand for metals used in emission-curbing catalysts for traditional combustion engine vehicles.
Dollar supremacy
The South African rand weakened by 0.4% against the US dollar, erasing some recent gains, as the dollar strengthened by more than 0.3% against major currencies. The rand had rallied previously, reflecting optimism that the US Federal Reserve might pause interest rate hikes. Investors are now focused on Federal Reserve Chairman Jerome Powell's upcoming speeches for hints on the central bank's stance, as well as South Africa's mining and manufacturing data for economic health clues. Both the Top 40 and all-share indices closed over 2% lower, primarily due to a more than 4% drop in the resources index. South Africa's benchmark 2030 government bond remained stable with a 10.400% yield.
Nigerias New Oil
Nigeria's NNPC has introduced a new crude grade called Nembe as the country seeks to increase oil production. The state owned company has resurrected the grade following past disruption by sabotage on the Nembe Creek Trunk Line. The first Nembe cargoes were sold in October, with plans to raise production from the current 50,000 barrels per day to 80,000 by Q1 2024 and 150,000 by the start of 2025. Nigeria aims to boost its oil production to around 1.8 million barrels per day by the end of 2023. The new crude grade is expected to compete with Brazilian and Azeri crude for European refiners.
Oil tumbles
Oil prices tumbled over 4% to their lowest levels since late July due to mixed Chinese economic data, increased OPEC exports, and a stronger U.S. dollar. Brent crude futures settled at $81.61 per barrel, down 4.2%, while U.S. West Texas Intermediate crude futures settled at $77.37 per barrel, down 4.3%. Concerns about a wider regional conflict disrupting oil supplies have eased, and OPEC's increased exports, up by about 1 million barrels per day since August, have added to the pressure on prices. China's economic outlook, along with rising U.S. crude oil stocks, contributed to the bearish sentiment.
