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Glencore’s business division had a strong start to the year, driven by rising prices for its crucial commodities as the global economic outlook improved.
The Swiss-based company, which is also a large miner, said its full-year earnings from its marketing unit would be at the upper end of its $ 2.2 million targeting range at $ 3.2 billion.
Commodities, from copper to coal, have skyrocketed due to strong demand from China and elsewhere as the world economy emerges from the coronavirus pandemic.
Copper, which is used in everything from appliances to electric vehicles, came in at more than $ 10,000 a tonne on Wednesday, following a strong run from its Covid-19 minimums in March 2020.
The metal was less than $ 200 away to surpass its previous record, set in 2011 during a commodity boom.
In a quarterly production report, Glencore said copper prices had averaged $ 8,501 in the three months leading up to March, up 51% from the same period last year, while zinc rose 29 %, nickel 38% and thermal coal 27%.
Tyler Broda, an RBC analyst, said the back winds that supported Glencore’s trading group would continue for some time due to persistent supply disruptions in commodity-producing countries like Chile.
Glencore’s trading arm helps soften the most volatile gains from its mining assets. It is closely followed by investors due to the large amounts of cash it can generate. It also supports Glencore’s dividend policy.
Last year, the unit achieved one of its best performances, as it reported earnings before interest and taxes of $ 3.3 billion while its operators charged the turbulence created by the coronavirus in the oil and metal markets.
In Wednesday’s update, Glencore said production of its mining assets in the first quarter of 2021 had been in line with expectations.
Glencore’s longtime executive director, Ivan Glasenberg, will retire in June. He will be replaced by Gary Nagle, the head of his coal assets.
A package of payments proposed by Nagle has been the subject of fire by representative groups and some investors. Still, company chairman Tony Hayward has said he expects significant support for the package at Switzerland’s annual meeting tomorrow.
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