SHANGHAI, Oct 11 (SMM) - Strikes action at the South African port and freight rail operator Transnet has worsened as more union members joined the protests.
Cobus van Vuuren, general secretary of the United National Transport Union (UNTU) said in an interview on October 9, "The United National Transport Union (UNTU) is Transnet’s major labour union, and its workers have started a strike action on October 6. The second largest labour union, South African Transport and Allied Workers Union (SATAWU), and other small labour unions will also join the strike from October 10."
Transnet, a large company operating South Africa’s freight rail, industrial ports and fuel pipeline, has declared force majeure at its ports as a result of labour strike.
"It is expected that all ports and freight rail will stop operating today." said the chief executive of Business Leadership South Africa (BLSA), Busi Mavuso, in a statement on October 10. The current strike is catastrophic not only for the healthcare industry and sectors directly related to imports and exports (such as mining), but also for the country's economy as a whole.
Protesters marched near the Transnet facility at the Cape Town harbour as police watched from a distance. Cranes for the containers at the port seemed to be shut down, and there were rare signs of trucks.
Kumba Iron Ore, a local supplier of high-quality iron ore, said the disruption would affect the company export sales of 120,000 mt of iron ore every day. The company's statement pointed out the in the first week of the strike, the it was forced to cut the iron ore production by 50,000 mt per day, and the figure might jump to 90,000 mt if the strike extends.
The largest thermal coal producer in South Africa, Thungela Resources, also suggested that a two-week-long strike at the state-owned logistics firm Transnet would cause it 300,000 mt of loss in exports. Apart from that, the export of chromium and manganese is also disturbed.
According to SMM survey, the strike so far has a relatively small impact on the domestic import of manganese ore from South Africa. The railway transportation is currently hindered, but the shipment was unaffected. If the strike extends, some mining companies in South Africa may choose replace railway transportation with road transportation, which means the delivery will be little limited. In addition, the previous arrivals of manganese ore in China were stable, but the demand from domestic steel mills was poor and the operating rates of downstream ferroalloy plants stayed low. Therefore, the manganese ore inventories at domestic ports went up slightly. Currently, the operating rates of downstream ferroalloy plants have increased, but the port inventories are still sufficient and will not be depleted in the short term. In this case, SMM predicts that the worker strike in South Africa will have little impact on domestic imported manganese ore. Nevertheless, if the strike is extended, it is possible that the falling manganese ore inventories at domestic ports and high concentration of sources will trigger an increase in manganese prices amid bullish sentiment. SMM will continue to pay attention to the updates on the event.
