New Glencore Chief will be in plum position as group rides copper bull

JOHANNESBURG - GARY NAGLE, who is set to take the reins of Glencore at the end of next month, will be in a plum position, as the firm’s share price has muscled more than 120 percent higher in the past year on bullish commodity prices.

Current chief executive Ivan Glasenberg is to retire next month after nearly 19 years at the helm.

The commodity trading and mining company’s share price climbed more than 3 percent to R67.10 per share during early trade yesterday (WED) before closing the day at xxx per share as commodity prices continue to soar.

Glencore has been benefiting from the boom in many commodity prices - particularly platinum group metals and iron ore - on expectations of increased industrial demand as the economic recovery gathers pace.

Glencore has three major revenue streams, with the most important the mining of precious metals, and the majority of the metals produced is copper.

There has been a sharp increase in the demand for copper, currently pushing into record territories, as it has risen more than 30 percent in the year-to-date.

Last week, the copper price soared to an all-time high, topping its record price, after reaching $13 200 (R1.85 million) a ton as demand rose on economies rebounding from the Covid-19 pandemic.

The London-listed company said last month that its copper production rose by 3 percent in the first quarter, while it stuck to its production targets for 2021.

It expects its full-year marketing earnings before interest and taxes to be between $2.2 billion and $3.2bn, the top range of its annual guidance.

Momentum Securities portfolio manager Wian van Wyk said Glencore’s share price has risen more than 120 percent within the past year on rising demand for commodities.

Van Wyk said that they foresaw this growth continuing since Glencore was the second largest producer of copper globally.

He said this was boosted by the prospect of US government-sponsored infrastructure expenditure, as well as stronger spending on infrastructure for electric vehicles.

“The global demand seems likely, due to strong economic recovery being a primary driver within the price, rather than supply cuts,” Van Wyk said.

“I believe as the commodity industry continues to see an increase in demand, as lockdown restrictions are eased further and increased imports and exports are seen, Glencore will continue to perform and might even outperform the market outlook.”

The prices of commodities such as steel, copper and oil have been on a rally since last week, driven by rising demand because of the strong economic recovery, particularly in China and the US.

Yesterday, Brent crude rose 0.68 percent to $69.41 per barrel, coal futures rose to $97 per ton, and gold held steady near a three-month high at around $1 835 an ounce.

Oil prices were rising on lingering fears of gasoline shortages because of an outage at the largest US fuel pipeline system after a cyber-attack.