Glencore sees bumper profits from commodity trading

GLENCORE plc is on course for more bumper profits from its sprawling commodity trading business as the disruptions from Russia’s invasion of Ukraine continue to ripple through global markets. 

Commodities from oil and gas to corn and copper have seen wild swings this year, creating opportunities for the traders who transport the world’s resources. Glencore said it expects second-half trading profits will probably exceed US$1.6 billion (RM7.55 billion), the top end of its guidance range on a half-year basis. 

Still trading earnings in the second half will be significantly lower than the record US$3.7 billion it posted in the first six months of the year. And while Glencore’s marketing business continues to reap huge profits, the company — like many others in the sector — is struggling to hit output targets at its mines. 

Glencore, the world’s biggest coal shipper, cut its production goal for the fuel this year by almost 10% after a huge flood in Australia, in a move that’s likely to put even more pressure on stretched energy markets. Coal prices have soared to records this year as demand surges, and producers around the world have been running at full tilt with little ability to increase output. 

The company, which reported record first-half profits on the back of soaring coal prices, had already flagged in July that it was accessing the impact of the floods. Full-year output is now seen at 110 million tonnes, and it also lowered zinc and nickel output targets. Bloomberg

  • This article first appeared in The Malaysian Reserve weekly print edition