Hitting the Trump hump

Meanwhile, on the slightly less glamorous end of the business spectrum, Hulamin’s headline EPS have dropped sharply in a period of considerable volatility.

The aluminium company has done a good job of managing the conditions that were under its control, with unit costs, efficiencies and working capital management all heading in the right direction. But with 60% of sales going to the export market, it was hit hard by the 7% strengthening of the rand against the dollar.

Trading conditions were difficult both locally and internationally, with sociopolitical uncertainty spooking the local market and contributing to an exchange rate that’s been flying around all over the place.

Perhaps more concerning for the stability of major markets the world over, however, is the effect — which Hulamin has experienced — of the somewhat idiosyncratic approach of Donald Trump’s administration towards global trade negotiations, given that policies with serious implications appear to be worked out on the back of a fag pack.

The particular concern for Hulamin was US sanctions on Russia, which placed immediate pressure on primary production from Rusal. This meant the aluminium price shot up by $650 a ton within two weeks. It was followed by the US imposition of tariffs on aluminium, which had a disruptive effect on imports, as supply out of China contracted. This particular instance had a positive effect on the pricing of Hulamin’s general rolled products, but overall it adds up to levels of volatility that add huge difficulty to business planning.