Abstract
M.Com. (Mining Economics)
This study indicated that price cyclicity in commodity markets
is caused by various factors, and that this in itself can
cause certain short and long term effects for mineral
producers. One short term effect of price cyclicity is its potential
influence on the stockpiling activities of mineral producers.
Data on the activities of the producers of 24 mineral products
in South Africa during the period 1980 - 1985 were analysed to
quantify the potential influences. The only mineral products
that show a significant inverse relationship between export
prices and stockpiling in real terms, are diamonds and
antimony. In both instances producers tend to stockpile if
the price of the product declines, and to sell stocks if the
price increases.
This tendency is probably related to the relatively dominant
position in the production and marketing of minerals that
South African producers of these mineral products have
achieved in the world market. Due to the confidentiality of
statistics, the data of other dominant producers, for example
the South African platinum producers, could not be included in
the analysis. With the possible exception of the dominant producers, speculative
stockpiling by South African producers is the exception
rather than the rule...