Glencore saw its output in copper, zinc, lead and nickel dip this morning as it struggled with a downturn in production but said it expects to exceed its long-term annual guidance – with trading profits reaching as high $4 (£3.1bn).
The commodity giant said the half-year results were in line with expectations, with its full year production guidance remaining unchanged.
It expects earnings before interest and tax (EBIT) to hit the top end of its guidance, between $3.5-4.0 billion (£3.1bn).
Chief Executive Officer Gary Nagle, said: “We are pleased to report a solid first-half production performance from our underlying base business, where our key copper, coal and zinc assets performed in line with expectations and previously communicated guidance.”
Nickel production, at 46,400 tonnes, was 20 per cent lower year-on-year, with the firm noting the impacts of a strike at its Raglan mine in 2022.
The closure of its Matagami mine also impacted own sourced zinc production which, at 434,700 tonnes, was 10 per cent lower year-on-year. Glencore said this also reflected the cessation of its South American zinc operations.
Copper, at 488,000, was down 4 per cent.
Cobalt – which the firm produces from Katanga in the Congo – saw an upturn of 5 per cent, which it said were as a result of improved recoveries in its Congo-based operations.
Nagle said: “Our full year production guidance remains unchanged from earlier guidance. Second half volume weightings in copper, zinc and nickel reflect higher expected production volumes from Collahuasi, Kazzinc, Mount Isa and INO.”
Operational issues have hit Glencore over the past half, with downturns in the production of many of its primary commodities.
It comes after Russia’s invasion of Ukraine last-year caused commodity prices to surge to their highest levels since 2008, prompting record profits.
The company said today that this wild market volatility had now normalised, which would impact profitability .
“In our marketing segment, progressively through 2023, the particularly elevated commodity market imbalances and volatility levels that prevailed through much of 2022, have largely normalised, which, while clearly impacting profitability, has allowed for the release of some of the investment made in non-RMI marketing working capital in 2022,” Nagle said.