Glencore Share Price (GLEN)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Glencore	LSE:GLEN	London	Ordinary Share	JE00B4T3BW64	ORD USD0.01

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	+0.60p	+0.16%	378.20p	377.75p	377.95p	385.45p	374.40p	382.00p	36,297,058	16:35:22

Industry Sector	Turnover (m)	Profit (m)	EPS - Basic	PE Ratio	Market Cap (m)
Mining	123,859.6	-444.6	8.1	49.7	54,440.91

Related Shares
Rio Tinto (RIO), BHP Billiton (BLT), Arian Silver (AGQ), Central Rand (CRND)

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Date	Time	Source	Headline
20/10/2017	13:18	ITALNC	EUROPEAN MARKET MIDDAY: Europa in verde, si allontana incubo Catalogna
20/10/2017	12:52	ITALNC	LONDON MARKET MIDDAY: FTSE 100 in rialzo per indebolimento sterlina
19/10/2017	13:05	ITALNC	PRESS: Intesa potrebbe finanziare Arctic Lng di Novatek
18/10/2017	18:36	DJN	Glencore to Convert Rusal Holding into En+ Shares After London Listing
18/10/2017	18:07	ALNC	Glencore To Take Stake In En+ Group In Return For UC RUSAL Stake(ALLISS)
18/10/2017	16:41	ALNCF	Alliance News Flash Headline
16/10/2017	17:39	DJN	Glencore, QIA to Proceed with EUR7.78 Billion Sale of Rosneft Stake
16/10/2017	17:29	ITALNC	Glencore raggiunge accordo vendita Rosneft, a Intesa rientra prestito
16/10/2017	16:46	ALNC	TOP NEWS: Glencore Finalises EUR3.91 Billion Rosneft Stake Deal
16/10/2017	16:26	UKREG	Glencore PLC Stake in Rosneft held by Glencore-QIA Consortium

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Date	Time	Title	Posts
16/10/2017	19:10	Glencore International - A global player	13,832
22/9/2016	18:38	Analysts' View on Glencore (GLEN)	-
02/2/2016	15:29	GLENCORE INTERNATIONAL PLC: Jon's Bear Club	500
27/11/2015	14:24	To Buy some GLEN	3
01/12/2014	12:08	Glencore Xstrata	13

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22/10/2017 09:20	Glencore Daily Update: Glencore is listed in the Mining sector of the London Stock Exchange with ticker GLEN. The last closing price for Glencore was 377.60p. Glencore has a 4 week average price of 327p and a 12 week average price of 312p. The 1 year high share price is 386.70p while the 1 year low share price is currently 230.60p. There are currently 14,394,740,908 shares in issue and the average daily traded volume is 38,690,436 shares. The market capitalisation of Glencore is £54,440,910,114.06. Read Full Thread Reply
07/10/2017 12:00	russell250: Glenkaz - I regret swearing the other day but I hate rampers equally shorters destroying value but you know I comment on various other boards eg pfg hur msl nsf as I trade full time - I try to be realistic with comments and expectations Silver spoon - I wish!! we only had an outside toilet and no central heating I came from an end of terrace in s wales , after college which few attended from my school as it was an under privileged area - 27 yrs working up to senior role for ftse100 - I took the risk of trading my spare funds and pension since age 51 I have been trading since 2014 full time - and my life has changed predominantly because I backed glencore - I have had significant success with glencore making over £3 million net on this stock to date - I love this stock I have reduced the percentage of my overall wealth in this stock as before I have been in up to 100% when stock was in recovery mode and I was less experienced I have been backing it from just over 70p. when large percentage swings were more prevalent - 5%+ daily very commonplace - but since recovery has seen shares above £2 the large percentage daily moves are less common --- I have had 2 occasions when I have had taken losses of over £250k on this stock This remains my largest holding and I am constantly revaluating my short medium target price as more and more deals are made - likes of hero from harris associates have grown corporate confidence - plus China is still eating commodities in its growth I see glencore above £4 by feb/march 2018 and hopefully north of £4.50 by end of next year - they are fantastically placed to use their trading arm and key holdings in zinc copper cobalt to continue to grow cash flow for deals ---not forgetting coal and new partnerships with oil. Glasenburg will buy a large American agriculture manufacturer - to balance his commodity grain trading needs I also see the possibility of a takeover in the future of rio - as companies like bhp/rio return more dividends and buybacks to shareholders than Glencore growth aspirations But I still feel the statements made of huge share price growth in such short time at companies current valuation as pure ramping - Read Full Thread Follow Reply
26/9/2016 09:25	losses: Hedge Fund Lansdowne Loses Big on Glencore BetSource: Dow Jones NewsLONDON-Hedge fund firm Lansdowne Partners (UK) LLP is one of the biggest losers from the sharp rebound in Glencore PLC shares this year.Lansdowne, one of the world's biggest hedge-fund firms with around $20 billion in assets under management, has been betting against Glencore's shares for three years or more, according to regulatory disclosures.It benefited from their steep fall in the second half of last year on worries about the company's debt levels.This year the mining giant's shares have come roaring back. They are up around 130% this year to £ 2.12. And this has hurt those hedge funds that continue to hold a 'short' position and bet on a price fall.Since the start of the year Lansdowne has lost approximately £ 250 million ($326 million) on the position, according to calculations by The Wall Street Journal based on regulatory disclosures and closing share prices.A spokesman for Lansdowne declined to comment.Based just off London's expensive Berkeley Square, the media-shy investment firm has made double-digit gains in each of the past four years in its flagship Developed Markets fund, run by Peter Davies and Jonathon Regis.This year to September 16 it is down 13.2% after a series of missteps.Lansdowne's most recent letter to investors, reviewed by the Journal, showed its main fund was running a bet against shares in the basic materials sector.Overall hedge fund bets have come down sharply this year as Glencore's shares have recovered and are now at less than one-third of the levels seen in February, according to data group Markit.However, some investors have profited handsomely from Glencore's rebound.David Herro, international chief investment officer for U.S. asset manager Harris Associates LP, more than doubled its stake following the share issue last September. Harris has since trimmed its position to just under 6% from 8%, Mr. Herro said. "We still think the stock is worth well over 400 pence once copper begins to normalize," he said.Van Eck Global, which holds roughly $200 million of Glencore stock, made a 64% or $15.5 million return on shares bought and sold since September 2015, according to Journal calculations based on FactSet data."People didn't understand what was going on with the business at that point," said portfolio manager Charl Malan. People didn't realize that the company had a credible plan in place to reduce net debt, he added. "There is upside to their cash flow....They're going to return money to shareholders. You watch," he said.The rise in Glencore's share price this year has been driven by rising commodity prices, particularly in zinc and coal. The company has also taken steps to cut its debt burden. This year's rise marks a revival in fortune. On Sept. 28, 2015, its shares fell 29% in one day, to 69 pence, because of concerns it would struggle to pay down almost $30 billion in net debt. The company's stock had been steadily declining since its initial public offering price of 530 pence in 2011.Glencore responded to investor concerns by announcing a raft of measures to cut debt, including an equity issue, dividend suspensions and billions of dollars in asset sales. The plan is bearing fruit, with analysts expecting net debt to drop to well within the company's guided range of $16.5 billion to $17.5 billion by year-end, down from $23.6 billion at June-end and $29.6 billion a year before then.Rising commodity prices have also been a boon to earnings. As the world's largest exporter of thermal coal and zinc miner, Glencore has benefited from the rise in zinc and coal prices, two of its key earnings drivers.Write to Laurence Fletcher at laurence.fletcher@wsj.com (END) Dow Jones NewswiresSeptember 23, 2016 15:05 ET (19:05 GMT)Copyright (c) 2016 Dow Jones & Company, Inc. Read Full Thread Follow Reply
23/9/2016 19:59	tsmith2: Lansdowne Partners Loses Big on Glencore Bet -- UpdateSource: Dow Jones NewsBy Laurence Fletcher LONDON -- Hedge fund firm Lansdowne Partners (UK) LLP is one of the biggest losers from the sharp rebound in Glencore PLC shares this year.Lansdowne, one of the world's biggest hedge-fund firms with around $20 billion in assets under management, has been betting against Glencore's shares for three years or more, according to regulatory disclosures.It benefited from their steep fall in the second half of last year on worries about the company's debt levels.This year the mining giant's shares have come roaring back. They are up around 130% this year to GBP2.12. And this has hurt those hedge funds that continue to hold a 'short' position and bet on a price fall.Since the start of the year Lansdowne has lost approximately GBP250 million ($326 million) on the position, according to calculations by The Wall Street Journal based on regulatory disclosures and closing share prices.A spokesman for Lansdowne declined to comment.Based just off London's expensive Berkeley Square, the media-shy investment firm has made double-digit gains in each of the past four years in its flagship Developed Markets fund, run by Peter Davies and Jonathon Regis.This year to September 16 it is down 13.2% after a series of missteps.Lansdowne's most recent letter to investors, reviewed by the Journal, showed its main fund was running a bet against shares in the basic materials sector.Overall hedge fund bets have come down sharply this year as Glencore's shares have recovered and are now at less than one-third of the levels seen in February, according to data group Markit.However, some investors have profited handsomely from Glencore's rebound.David Herro, international chief investment officer for U.S. asset manager Harris Associates LP, more than doubled its stake following the share issue last September. Harris has since trimmed its position to just under 6% from 8%, Mr. Herro said. "We still think the stock is worth well over 400 pence once copper begins to normalize," he said.Van Eck Global, which holds roughly $200 million of Glencore stock, made a 64% or $15.5 million return on shares bought and sold since September 2015, according to Journal calculations based on FactSet data."People didn't understand what was going on with the business at that point," said portfolio manager Charl Malan. People didn't realize that the company had a credible plan in place to reduce net debt, he added. "There is upside to their cash flow....They're going to return money to shareholders. You watch," he said.The rise in Glencore's share price this year has been driven by rising commodity prices, particularly in zinc and coal. The company has also taken steps to cut its debt burden. This year's rise marks a revival in fortune. On Sept. 28, 2015, its shares fell 29% in one day, to 69 pence, because of concerns it would struggle to pay down almost $30 billion in net debt. The company's stock had been steadily declining since its initial public offering price of 530 pence in 2011.Glencore responded to investor concerns by announcing a raft of measures to cut debt, including an equity issue, dividend suspensions and billions of dollars in asset sales. The plan is bearing fruit, with analysts expecting net debt to drop to well within the company's guided range of $16.5 billion to $17.5 billion by year-end, down from $23.6 billion at June-end and $29.6 billion a year before then.Rising commodity prices have also been a boon to earnings. As the world's largest exporter of thermal coal and zinc miner, Glencore has benefited from the rise in zinc and coal prices, two of its key earnings drivers.Write to Laurence Fletcher at laurence.fletcher@wsj.com (END) Dow Jones NewswiresSeptember 23, 2016 13:43 ET (17:43 GMT)Copyright (c) 2016 Dow Jones & Company, Inc. Read Full Thread Follow Reply
25/8/2016 10:36	kdr246: tsmith2 apologies for the delay...For a chief executive once renowned as buccaneering, Glencore's Ivan Glasenberg has pledged less swash and more buckling down.On Wednesday, the miner-cum-commodity trader confirmed that it would revise down its debt targets. The ratio of net debt to earnings before interest, tax, depreciation and amortisation should fall to two, from three, in an attempt to make Glencore more boring. In the new normal of lower commodity prices, shareholders should welcome a duller look.Glencore's equity value depends on its debt, even if questions about the company's survival have been quashed. Prices for its credit default swaps, a proxy for debt riskiness, have fallen by three-quarters since January.The share price has duly doubled. The more Glencore preserves free cash flow from existing operations, and uses asset sales to de-lever, the more its market value should benefit.There are good reasons to believe it will. Net debt, which includes inventories of commodities Glencore describes as "readily" sellable, has fallen from $36bn in 2013 to $23.5bn.Asset sales this year have reached $4bn and UBS estimates there could be another $2bn-$2.5bn to come, including an Australian railway and a gold mine in Kazakhstan, which would put the net debt target, assuming projected ebitda of $10.5bn, comfortably within sight.Meanwhile, copper and coal prices, nearly half of group ebitda, have increased recently, boosting the share price. Spot prices imply free cash flow of $4.5bn by the end of the year.There is even a prospect of recommencing the dividend. But the rally has in large part been driven by Chinese stimulus spending and cuts in its local coal production, boons which are unlikely to be renewed in the near future. Thus downward pressure on Glencore's selling prices could resume.In contrast to Rio Tinto, whose shares trade at 10 times enterprise value to ebitda, Glencore's preference for safety may have held its value back to about seven times. Mr Glasenberg deserves more credit for steadying the ship. Meeting his targets should boost its rating.Cont.... Read Full Thread Follow Reply
06/3/2016 09:57	togglebrush: King Copper has been a key driver in the share price of Glencore. Late autumn the doom-sayers suggested that a price below $2.00 would be a financial disaster. Middle two weeks of January had the price was below 2.00. It closed down to 1.945 at its lowest. This month the price has recovered and is some 10% above that level. The prices are those given in the morning by CNBC. ‘ In the past six months there has been correlation between share price (x) and price of copper (y) .Simple formulae y = 0.0046x + 1.6945 with confidence level R² = 0.3781. In other terms the ratio has a median in past six months of 44.93 and a standard deviation of 6.69 (Share Price / Copper Price)… which relate to Ratio in table below ‘ RNS or Key_____ Date______ Copper__ Share___ Ratio ‘ Q3 Prod________04/11/2015__2.3220___ 125.85__ 54.1990 Review_________10/12/2015__2.1004____ 88.90__ 42.3253 New Year_______31/12/2015__2.1350____ 90.48__ 42.3794 Finance RNS____17/02/2016__2.0675____120.00__ 58.0411 FY RESULTS_____01/03/2016__2.1570____130.50__ 60.5007 Friday_________04/03/2016__2.2600____160.00__ 70.7965 ‘ Point is SHARE PRICE has gone up much faster than the price of Copper in recent days and this MAY ??? slow down the momentum of the share price. Read Full Thread Follow Reply
04/11/2015 12:30	robrah: It is funny watching the glen share price failing @128 129U can just feel the heartbeat of the bulls like warwick and the lot speed up every time there is a small move down lolDon't worry there big down days are coming soon. Read Full Thread Follow Reply
30/10/2015 10:11	brahmsnliszt: LONDON \| BY SARAH MCFARLANE AND DMITRY ZHDANNIKOV Oct 29 Commodities mining and trading giant Glencore is reducing its $18 billion inventory pile, industry sources say, a move ratings agencies say could help assuage concerns about its balance sheet.The biggest player in the secretive commodities trading industry to hold a public share listing that requires it to disclose its accounts, Glencore has been battered by the global downturn in commodities prices.Worries about its $30 billion debt burden saw its share price lose nearly two thirds if its value so far this year. The firm has pledged to reduce its debt by $10 billion by suspending dividends, reducing investments and selling some assets in order to protect its investment grade debt rating.Sources close to the companyhttp://images.intellitxt.com/ast/adTypes/icon1.png say it is also reducing its vast trading inventory, driven in part by the winding up of "contango" market conditions, under which long-dated futures contracts were priced higher than spot prices, encouraging traders to store material to resell it at a profit later."If you look at where commodities prices are today and how the market conditions changed in the past six months - it is fair to say that the only way for inventories is to go down," a source close to Glencore said.That could help appease ratings agencies such as Moody's and S&P, which both rate Glencore just two notches above junk, with a negative outlook that means its investment grade rating is in jeopardy."Sometimes the balance sheet is just more important than the contango play," said the source close to the company.A rating cut would raise the cost of borrowing. Some brokerage analysts see this as a potential threat to Glencore's businesshttp://images.intellitxt.com/ast/adTypes/lb_icon1.png model. Glencore denies it would have a major impact but says it wants to avoid it anyway.INVENTORY VOLUME BALLOONSDespite the steep fall in commodities prices since last year, the total value of Glencore's inventory has barely budged, another way of saying that the volume of hydrocarbons, metals and other commodities the firm is holding has ballooned in size.Under the "contango" conditions in place at the start of 2015, when traders expected the price of oil to recover from last year's steep falls, the cost of buying and storing it was lower than the price for contracts to deliver it in future months. Traders responded by storing millions of barrels in ships and inland tanks to earn a profit selling it later.But in recent months, with a global oil glut growing, the cost of storage rising and the market now expecting low prices to persist longer, future prices for many commodities have fallen closer to, or lower than, spot prices. That means there is less to be earned from holding inventory.Hence traders ranging from BP to Vitol have been reducing inventories. When Glencore presents investors with an update on Nov 4 it will most likely show a cut in inventory of billions of dollars.Despite trading larger volumes in the first half of this year, Glencore's trading generated lower than expected earnings of $1.1 billion, down from $1.5 billion in the first half of 2014. Glencore expects to deliver $1.4 billion-$1.5 billion in trading earnings in the second half, although that task might prove to be challenging given shrinking volumes and an unwinding contango."You shrink your trading book and you shrink some trading profit margin opportunities," said David Staples, managing director at Moody's for EMEA corporate finance.Nevertheless, the smaller inventory could produce benefits by reducing the need for the company to take other steps to shrink its balance sheet to assuage the ratings agencies.SOLVENCY UNDER SCRUTINYBoth S&P and Moody's are awaiting the execution of the $10 billion debt cut plan to decide whether to keep their negative outlooks.While details of Glencore's $30 billion long-term debt - in bonds and syndicated loans - are publicly known, much less information is available about the vast mountain of commodities it holds for trading purposes, which it finances throught short-term banking loans.Glencore considers its inventory a trade secret and discloses only its total value, which was $17.9 billion in its last quarterly accounts. The full details are shared only with its auditors Deloitte and the ratings agencies Moody's and S&P.The firm says the inventory should not matter in calculations of its debt: there is no risk to its solvency from holding a huge stock of metal in rail cars or oil in tankers around the world for trading purposes. The inventory is fully audited by Deloitte, accounted for at market prices and hedged to dampen the risk of possible fluctuations in price.But the ratings agencies nevertheless apply a discount to their valuations of trading inventory, to account for what they see as risk that still remains despite hedging. That in turn increases their overall estimate of Glencore's debt.S&P says it discounts the most liquid trading inventories like crude oil by 10 percent, and less liquid inventories like alumina by 25 percent. Those discounts are one of the reasons it tallies Glencore's debt at $37 billion, rather than the $30 billion Glencore says it owes."It is mostly just to recognise the risk that there is a haircut in a fire sale scenario, in a speedy liquidation. It is fairly standard to assume some kind of a haircut," said Simon Redmond, S&P's director for oil and gas ratings.Because of Glencore's hedging, "there should not be material price risk on the trading inventories which is obviously critical from our perspective," he said. "But there is also some basis risk exposure because they can't hedge perfectly."Moody's applies an even bigger discount of 50 percent to the inventory.Reducing the inventory could reduce the need to shrink the balance sheet elsewhere, said Moody's Staples, although he said reducing long-term debt was still more important than cutting short-term borrowing related to inventories."A mining company without that kind of operation (trading), it's options are cut dividends and cut capex. Glencore has the extra lever, which is if they have to generate cash flow they can shrink their trading operations," he said. (Writing by Dmitry Zhdannikov; Editing by Peter Graff) Read Full Thread Follow Reply
30/9/2015 03:15	spob: Analysts at eye of Glencore storm speak of their ‘boldest call’ Laura Noonan and Neil Hume FT September 29, 2015 On Monday morning, three mining analysts at Investec’s London office did something they have done dozens of times in the 50 years they have collectively spent covering the industry. They published a note. It sparked a share price rout in one of the miners in their analysis. Glencore, the trading and mining group that came off worst in Investec’s assessment of the mining industry’s challenges, plummeted 29 per cent on the London exchange in the hours after the note was released. The slump continued in Asia, with a 27.5 per cent fall in the group’s value on the Hong Kong exchange. “The report generated a large number of follow-up calls,” Investec said. Jeremy Wrathall, the bank’s head of natural resources research, said that in his 25 years in the industry he has “never seen anything like it”. “It generated a huge amount of attention,” he said. Mr Wrathall and his two co-authors, Hunter Hillcoat, a 15-year veteran of the sector, and Marc Elliott, the lead analyst on Glencore, have been dealing with a barrage of calls from investors and other companies mentioned in the report. “There hasn’t been a hostile reaction [from the other companies],” Mr Wrathall said. Glencore called once — Mr Wrathall would not give details of the tone of that call. The South-African owned bank has not been shy about highlighting the mining sector’s weaknesses before, headlining a note about African Minerals in September last year with a blunt “Tell them they’re dreaming”. That said, Investec is not known as a perpetual pessimist. “I don’t think they [Investec] have a reputation as very aggressively negative,” said one market insider. “They would be a little bit more independent than some of them,” he added. Three big banks — Barclays, Citigroup and Morgan Stanley — led a $2.5bn capital raising for Glencore that closed a fortnight ago. Investec launched its Glencore coverage with a “sell” recommendation in November 2013, but moved to a “hold” three months later and then a “buy” in September 2014. That “buy” stayed in place right up until mid-July 2015, even as the share price faltered. In mid-August, Investec returned to a “sell”. In an ironic twist, last Friday, Investec upgraded Glencore to a “hold” with a price target of 125p — some 45 per cent above the low it hit on Monday and a far cry from the 79.92p it had rebounded to by mid-afternoon on Tuesday. Mr Wrathall described this week’s note as his team’s “boldest call” but stressed that it was a call on the overly indebted mining industry as a whole, not a call on Glencore. Some doubt whether Investec’s research — which showed Glencore’s equity could be wiped out if weak commodity prices persist — was the trigger for Glencore’s share price woes. “A FTSE 100 company does not fall 29 per cent in value because an analyst wrote a note,” said a senior investment banker in London. “Investec is a midsized independent research house. They have a bit of credibility because they are independent ... but these are very sophisticated investors.” Another senior banker said other analysts — including Bank of America, Goldman Sachs and Morgan Stanley — published similar analysis on how Glencore would fare if the commodities rout continued. Morgan Stanley said the shares could be worth just 17p in a depressed commodity price environment. “I don’t think it was the Investec note particularly (that caused the fall),” the banker said, adding that Monday’s data from China was a bigger concern. China said industrial profits fell 8.8 per cent in August, far more than expected and the biggest fall in four years. Another industry insider criticised the Investec analysis as “simplistic221;. “The theme of the note was progressed over several weeks and was carefully structured to address the wider issue of the rise of debt among the miners following the [global financial crisis] and the implications that could arise if commodity prices do not recover,” Investec said. “Glencore was identified as one that could be the most problematic. It was intended to be an objective way of looking at the value of equity as a proportion of overall embedded value and to highlight the overall problem of the proportion of debt and the associated costs.” Investec’s London office is no stranger to making headlines. In December the bank was forced to “apologise unreservedly” for headlining a research note on Standard Chartered’s regulatory difficulties with the dying words of Eric Garner, an unarmed black man killed in a police chokehold. The headline — “I can’t breathe” — drew widespread condemnation including a tweet from Benjamin Lawsky, one of the US regulators who brought actions against StanChart, and said: “Terrible. Should be disavowed with apologies by Investec.” Read Full Thread Follow Reply
24/9/2015 15:59	gunnerman: The current GLEN share price collapse has the look of a typical fear driven over reaction and no doubt we will all be asking why the hell we didn't buy more in a few months time. While China is the global driver of the mining business, the market just seem to ignore the fact that China is not in recession, but that growth is just slowing to a "mere" 6-7%. Does that not suggest to you that demand will soon pick up? Is £1 the bottom? Well neither you, I or the Archangel Gabriel know that, but the risk to reward ratio here is stacked in favour of the bulls. Good luck all. Read Full Thread Follow Reply
10/9/2015 14:11	forwood: FT article - accompanied by a video suggesting miners still have more to fall on historic commodity price comparisons. A view put forward here yesterday - but one that ignores the cost side of the equation. Miners will simply not pull it out of the ground at a loss for long - as Glen has already shown with copper. Ivan Glasenberg, co-founder and chief executive of Glencore, delights in telling his rivals in the commodities industry that they are wrong, and in trying to prove it by running his business differently. So it takes quite an upheaval to persuade Mr Glasenberg that he, and not someone else, is mistaken. He tacitly admitted it this week by reversing course as his share price fell, Standard & Poor’s warned about Glencore’s debt rating and hedge funds ganged up. Instead of defying others as usual, he did what he had been told by implementing a plan to cut $10bn in debt and shore up Glencore’s balance sheet. I wonder, though, whether the message has entirely sunk in. Someone who starts a stock exchange statement with the word “notwithstanding”, and lists all the reasons why everything is fine before announcing a change of tack, has not yet reached “acceptance221; in Elisabeth Kübler-RossR17;s psychological model of the five stages of grief following loss. Mr Glasenberg is still flirting with “denial”. In one sense, he has surrendered and had no alternative. The slowdown in China, the plunge in the price of copper and industrial metals, and the chatter that Glencore would be in serious financial straits if the copper price kept on falling shocked him into action. Losing a paper fortune — his 8 per cent stake in Glencore is down to a mere £1.5bn — grabs one’s attention. But the market, it seems to me, is signalling more to Mr Glasenberg than discomfort at Glencore’s $30bn of net debt (compared with a market capitalisation that has dropped to £19bn this week from £37bn at its London initial public offering in 2011). It is conveying a lack of conviction about Glencore itself. Glencore has been an industry outlier since its post-IPO acquisition of Xstrata in 2012: a trading outfit integrated with a mining company that digs things out of the ground. While traders such as Trafigura (also descended from the late Marc Rich’s commodities trading business) mostly do one thing, and miners such as BHP Billiton and Rio Tinto mostly do another, Glencore does both. This is reminiscent of banking. Investment and retail banks used to be different businesses, run by different kinds of people, with different attitudes to risk and capital. In the 2000s boom the two sides converged, often to be run by risk-hungry traders and investment bankers rather than sober retail bankers. In the 2008 crash, the flaws in this innovation became obvious. Mining companies are not banks — Glencore’s debt leverage is far lower than any bank’s and linking a copper trader to a copper mine is less of a stretch than putting credit cards and credit derivatives under one roof. But Glencore’s travails show the tensions, especially in a downturn, in the model that Mr Glasenberg pioneered. The first tension is financial. Trading is a volume business with thin margins, in which leverage creates a high return on equity. The risk is limited by finance not being tied up for long — it is repaid when copper or oil is delivered — so traders use bank and short-term debt and do not need high ratings. Mining, in contrast, is a long-term, capital-intensive, cyclical business in which a good credit rating is essential. That protects a company such as BHP Billiton or Rio Tinto from a liquidity crisis when prices fall and many of its assets are still buried in the ground. A mining company’s balance sheet is inherently inflexible. Holding a lot of capital curbs returns in boom times but it comes into its own in a downturn, when a mining company can acquire assets that are going cheap, as many mines are now. Having miscalculated what the market would tolerate, Mr Glasenberg is having to retrench at the time when Glencore should be able to snap up mining bargains. The second tension is managerial. Like different breeds of banker, commodities traders have contrasting skills and attitudes to the mining engineers who explore for reserves and run mines. The trader specialises in risk taking and financial creativity; the engineer in risk mitigation and discipline. Trading is the dominant culture at Glencore. Mr Glasenberg initially agreed thatMick Davis, Xstrata’s former chief executive, would have that job in the merged company — and then took the role himself. Glencore’s mines are run by engineers not trading whizz-kids — even its rivals say they are efficient — but its heart is in trading. This combination has never been tried, and the way you discover whether an innovative business model works is to put it under pressure, which is what Glencore is experiencing now. Its head office in Switzerland must be suffering quite a stress test, given that its former partners have lost hundreds of millions in net worth, and it has had to shut some mines temporarily. The rebound in its shares this week suggests that its shareholders are less worried about the finances since Mr Glasenberg altered course. Well, it is a start. He may have to change his mind about other things, too. Read Full Thread Follow Reply

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