This brought the increase for the first nine months of 2011 to 8.3% year on year (y/y) to 102.3 million tons compared with a 9.0% rise for all of 2010 to 132.7 million tons. Second half shipments tend to be greater than the first half as there are fewer public holidays in the second half, so expectations are for the full year to reach 140 million tons.
Shipments out of Richards Bay, which are mostly coal, have disappointed with only a 1.1% y/y gain in the first nine months to 53.1 million tons, while mostly iron ore shipments out of Saldanha Bay have increased by 14.4% y/y to 39.5 million tons. The star performer has been mostly agricultural and manganese exports out of the other South African ports, which jumped by 31.0% y/y to 9.7 million tons.
The poor performance of coal exports has raised concerns that SA may once again lose out on the global commodity boom due to the lack of rail capacity. This was a constraint in the previous boom of 2002 to 2008 and instead of using the slack of the 2009 downturn to address issues of rail maintenance, Transnet Freight Rail (TFR) decided that derailments and cable theft were causing so many problems that the coal line between the Mpumalanga coalfields and Richards Bay Coal Terminal (RBCT) had to be closed for twenty days in May and June this year.
The result is that instead of achieving 7.4 million tons shipped in October 2010, RBCT only exported 3.6 million tons in May and 4.8 million tons in June and this improved to 5 million tons in September, even though coal mines sent 6.2 million tons to the stockpile. The coal stockpile was run down to 3 million tons at the end of June from 4.4 million tons at the end of May, but is now back at 5 million tons, so October 2011 coal exports may match October 2010 levels.
The impact of public holidays and the rail closure is seen in the y/y comparisons for the second and third quarters. The second quarter y/y increase was only 2.0%, while in the third quarter the growth jumped to 11.9%.
This should ease concerns that the slowdown in real gross domestic product (GDP) growth in the second quarter 2011 to 1.3% quarter on quarter at a seasonally adjusted annualised rate (saar) from 4.5% in both the first quarter 2011 and the fourth quarter 2010 is the sustainable growth path.
Although the third quarter started with poor data in July due to industrial action, the August and September data has shown an increasing growth momentum.
Cement sales volumes for instance moved from a 0.3% y/y decline in July to a 4.6% y/y gain in August and a 12.7% y/y rise in September to the highest monthly total since October 2008.
The South African Kagiso Purchasing Managers Index (PMI), which measures activity in the manufacturing sector, rose from 44.2 in July to 46.7 in August and 50.7 in September.
The data for August manufacturing production is due today, Wednesday 12 October, while the August mining production data is due on Thursday. The first estimate of third quarter GDP growth is due on 29 November.
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