What the continued slide in commodity prices means for South Africa

Iron ore below $50… copper at a six-year low… gold and platinum in trouble…

What does the continued slide in the prices of raw materials mean for South Africa?

The Money Show’s Bruce Whitfield interviewed Dr. Adrian Saville, Chief Investment Strategist for Citadel.

Scroll down for quotes from the audio below.

There’s a problem with supply and demand.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

There was a lot of capital expenditure in anticipation of ever increasing demand from China and others.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

South African miners have very high fixed costs. Productivity is sagging and being outstripped by wage demands.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

South Africa used to be the largest producer of gold. Production has dropped by 25% over the past 10 years.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

Production is flat, yet prices have halved.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

There is no sign of commodity prices buoying any time soon.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

Our most important exports remain raw materials. This puts pressure on the current account and the fiscus.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

We’re looking at a sub-1% growth economy.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

No country consumed its way to affluence. You save your way to affluence! We need export led and investment funded growth.

Dr. Adrian Saville, Chief Investment Strategist for Citadel

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