Glencore Sinks After Forecasting Lower Trading Profits

(Bloomberg) — Glencore Plc slumped in London after the commodity giant said it expects marketing profits to fall again this year, with increasing uncertainty over the prospects for the global economy.

Like many of its commodity trading peers, Glencore reaped bumper profits in recent years as Russia’s invasion of Ukraine whipsawed markets. Yet that is now easing and traders are adapting to a new normal, while President Donald Trump’s trade wars are also cooling economic activity.

Glencore said Wednesday that it currently expects its full-year marketing profits to be around the middle of its long-term guidance range of $2.2 billion to $3.2 billion.

That would signal an end to the windfall profits its reported since 2020, with earnings last dipping below $3 billion in 2019. Glencore fell as much as 8.2% in London, bringing this year’s drop to 31%.

While key markets such as gas and coal have declined from multi-year highs, industrial metals have had a tumultuous few months, with prices making big swings amid global trade turmoil. Glencore may have struggled to exploit those conditions.

“Disappointing that in these volatile times with significant regional arbitrage in copper that marketing guidance was not at the top end of the range,” said Ben Davis, an analyst at RBC Capital Markets.  

The company’s sprawling commodity trading business has already seen earnings decline from records set a couple of years ago. The unit earned $3.2 billion last year, down from double that profit in 2022.

Still, Glencore said that despite the financial-markets turmoil spurred by Trump’s tariffs, most commodity flows continued to operate normally. Should disruptions start arise, the firm said its traders could benefit.

“Owing to the various proposed and currently being implemented tariffs across commodity supply chains, it is likely that some physical trade flow re-orientation and dislocation will manifest over the coming months, which may present opportunities for our marketing business,” the company said.

Glencore maintained it current production targets, having earlier this year lowered its thermal coal output.

(Updates with shares from first paragraph)

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