Growth in yearly mining production slowed to 1.7% in April from 15.4% in March as growth in 9 of the 12 mineral categories surveyed slowed on a yearly basis, Nedbank said in a statement on Thursday.
On a seasonally adjusted basis, mining production decreased by 1.6% month-on-month in April, but was up 5.5% quarter-on-quarter for the three months to April 30.
The slowdown in mining production was expected given the high base recorded in March.
“Despite the softer April number, the recovery in miningproduction is still expected to continue at a moderate pace during the remainder of the year off last year’s low base,” the bank said.
Stronger global growth and firmer international commodity prices should support higher production and export sales. However, the general operating environment is likely to remain challenging.
The latest mining figures together with the weaker-than-expected manufacturing numbers released today suggest the economy remained weak in the second quarter.
This, together with softening consumer inflation, raises the probability of interest rate cuts later this year.
“However, the rand is the biggest threat to the inflation trajectory and will face considerable downside risk. Consequently, we believe that the Reserve Bank may take a cautious approach and keep rates on hold for the remainder of the year,” Nedbank stated.
Source: Mining Weekly