Company Reports

Stronger commodity prices, led by copper, along with increased volatility and dislocations due to the Iran war, drove a very strong first half for Glencore but the war also increased energy and sulphur costs. Adjusted NPAT of USD 3.7 billion, or USD 31 cps, contrasts with USD 550 million a year ago.

We have revised our midcycle coal prices. Inflation has recently pushed up and steepened cost curves. Higher royalties in Queensland—the world’s largest metallurgical coal exporter—also support prices and disincentivize investing in new supply.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. However, its marketing business (roughly 30% of forecast midcycle group EBITDA from 2030) should be relatively resilient to changes in China’s rate of economic growth.

New Hope's first-half adjusted EBITDA of AUD 215 million is down 58% on a year ago, with lower thermal coal prices the main driver. The interim dividend of AUD 10 cents per share is also down, by 47%. However, the Iran war is likely to drive higher earnings for it and our other coal mining coverage.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. However, its marketing business (roughly 30% of forecast midcycle group EBITDA from 2030) should be relatively resilient to changes in China’s rate of economic growth.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. However, its marketing business (roughly 30% of forecast midcycle group EBITDA from 2030) should be relatively resilient to changes in China’s rate of economic growth.

Glencore's 2025 adjusted net profit after tax fell 37% to USD 2.3 billion or USD 0.19 per share. This was mainly due to lower copper sales volumes in its Industrials business, while weaker energy and metallurgical coal markets impacted its marketing business.

After engaging in merger talks over the past month, Rio Tinto announced that it does not intend to make a firm offer for Glencore. In response, Rio's Australian-listed shares are unchanged at the time of writing, while Glencore shares closed 7% lower in London overnight.

Base metals prices have risen strongly since last quarter, with copper and aluminum driven by supply concerns and optimism over rising demand for use in decarbonization and electrification. Metallurgical coal and rare earths prices are also higher, but thermal coal and minerals sands are weaker.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. Glencore’s oil and agriculture businesses (held through its 16% stake in Bunge) are less China-centric but relatively small contributors, while its marketing business (roughly 30% of forecast midcycle group EBITDA from 2029) should be relatively resilient to changes in China’s rate of economic growth.

Rio and Glencore are again discussing a potential combination, including the possible acquisition by Rio of some or all of Glencore's business via an all-share merger. But details are scarce. Rio has not yet made a firm offer to Glencore, and no deal is agreed.

Thermal and metallurgical coal prices are in the doldrums due to slower economic growth and energy demand, and softer steelmaking in China, respectively. With the supply of both types of coal solid, higher-cost producers are starting to reduce or cease production, with some going out of business.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. Glencore’s oil and agriculture businesses (held through its 16% stake in Bunge) are less China-centric but relatively small contributors, while its marketing business (roughly 30% of forecast midcycle group EBITDA from 2029) should be relatively resilient to changes in China’s rate of economic growth.

Glencore reported 14% lower 2025 first-half adjusted EBITDA from a year ago due to lower coal prices and copper volumes, and subdued energy markets affecting marketing. Industrials volume guidance was tightened, and long-term marketing EBIT guidance was raised despite selling its Viterra stake.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. Glencore’s oil and agriculture businesses (held through its 50% stake in Viterra, which has agreed to merge with competitor Bunge, likely effective in 2025) are less China-centric but relatively small contributors, while its marketing business (roughly 30% of forecast midcycle group EBITDA from 2029) should be relatively resilient to changes in China’s rate of economic growth.

Shares of our iron ore, base metals, coal, and mineral sands miners have risen on last quarter after the shock of April 2, 2025 tariffs. With China driving demand for most commodities, investors appear to have concluded that tariffs wont materially weaken growth and commodity demand.

Shares are down 20% in 2025 (as of June 27) due to lower thermal and metallurgical coal prices on concerns tariffs will slow economic growth and energy demand. Despite high copper prices, this has led to Glencore trailing other copper miner shares. Lower earnings also weaken the balance sheet.

Demand from China has been the main driver of rising commodity prices in the past two decades. More recently, gold is close to historical highs on safe-haven demand. However, driven by weak China steel end-user demand and slower global growth, most other commodity prices have fallen.

Gold is higher in the March quarter as worries over tariffs affecting economic growth see a flight to safety. Despite likely slower global growth, copper is up as investors try to get ahead of potential tariffs on US copper imports. Iron ore is flat, while metallurgical and thermal coal are down.

Higher US tariffs could lead to slower economic growth and recession, reducing near-term commodity demand. Shares of our nongold mining coverage are materially lower on last quarter, led by base metals and coal miners.