Zinc, Copper Outlook Key When Glencore Speaks to Investors

LAGOS (Capital Markets in Africa) The commodities world will be scrutinizing Glencore Plc’s annual investor day on Tuesday for clues on when the top metals trader will restart shuttered zinc and copper production, as well as its plans to expand in agriculture. Here’s a few things to look out for:

Zinc has rallied 86 percent since Glencore curtailed output at some mines two years ago to revive languishing prices. With the metal now near the highest in a decade, speculation is mounting that the Swiss firm will soon bring mines back online.

Glencore last week said it’s hiring about 200 people for some Australian operations, and the firm could restart some zinc output in the country as soon as the first quarter of 2018, Bloomberg Intelligence analyst Andrew Cosgrove said.

The Baar, Switzerland-based giant is expected to give guidance on copper. It has said output of the metal will grow by at least 400,000 metric tons in the next two years, depending on the timing of restarts at African mines. Its Katanga Mining Ltd. unit on Monday said it will produce 150,000 tons of copper in the Democratic Republic of Congo next year. The metal is up 19 percent this year, heading for the best performance since 2010.

Investors also will watch for “structural and control changes” that Glencore said it will make at its vast copper business. In November, the firm’s head of copper, Aristotelis Mistakidis, and two other executives resigned from Katanga’s board following an internal review of reporting and accounting practices.

Battery Metals
Glencore is the top miner of cobalt, a critical component in batteries used in electric vehicles and which has surged in price. With automakers looking to secure supplies, Glencore’s output of cobalt and other battery materials — as well as the firm’s view on vehicle demand — could be key for the market.

Agriculture and Other Deals
After bouncing back from the commodities crisis of 2015, Glencore resumed its appetite for deals, including buying stakes in oil refining and fuel service stations and grabbing more of the zinc market. In agriculture, Chief Executive Officer Ivan Glasenberg is on the hunt for assets in the U.S. grain industry.

While Glencore is said to have agreed not to make a hostile bid for Bunge Ltd. before year-end, investors will be listening for any sliver of information on its intentions.

Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.

Source: Bloomberg Business News


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