Glencore Production Fell in Line With Guidance — Commodity Comment

Glencore has reported falls in production across most of its portfolio, in line with previous guidance, with stronger second-half volumes delivered across its key commodities. Here's what the world's biggest miner by revenue had to say:

On own sourced copper:

"Own sourced copper production of 1,010,100 metric tons was 48,000 tons (5%) lower than 2022, primarily reflecting the sale of Cobar in June 2023 and lower copper by-product production outside the Copper department."

"Own sourced copper sales during the period were some 13,000 tons lower than net relevant production, due to the timing of shipments."

On own sourced cobalt:

"Own sourced cobalt production of 41,300 tons was 2,500 tons (6%) lower than 2022, mainly due to feed plan adjustments at Mutanda, in the context of an oversupplied market."

On own sourced zinc:

"Own sourced zinc production of 918,500 tons was 20,000 tons (2%) lower than 2022, mainly reflecting the 2022 disposals of South American zinc operations (27,300 tons) and the closure of Matagami (17,300 tons), offset by stronger production from Kazzinc (Zhairem) and Antamina."

On own sourced nickel:

"Own sourced nickel production of 97,600 tons was 9,900 tons (9%) lower than 2022, primarily reflecting higher INO third party production (versus own sourced) and a planned shutdown of Murrin Murrin for routine maintenance, somewhat offset by a more consistent production performance from Koniambo."

On attributable ferrochrome:

"Attributable ferrochrome production of 1,162,000 tons was 326,000 tons (22%) lower than 2022, mainly due to planned additional smelter downtime during the 3-month high electricity demand winter season, a period of elevated power prices."

"4Q 2023 production was 133,000 tons (85%) higher than 3Q 2023, as the smelter portfolio progressively restarted, albeit with the Rustenburg smelter remaining idle, pending an improved price/cost environment."

On coal:

"Coal production of 113.6 million tons was 3.6 million tons (3%) higher than 2022, reflecting higher productivity in South Africa and a year over year easing in certain external factors that constrain capacity, such as wet weather and blockades."

On unit cost guidance:

"Aggregate thermal coal unit cost for FY 2023 is expected to be reported moderately below the previous guidance provided alongside our 2023 Half-Year results, primarily reflecting lower royalties."

"We expect to report higher copper, zinc and nickel FY 2023 unit costs than previous guidance, reflecting increased inflation across key operating regions, as well as the impact of cobalt stockpiling and related non-cash inventory adjustments within copper, a fixed cost volume variance impact for zinc and higher third-party feed production in nickel."

Shares at 0951 GMT were up 7.40 pence, or 1.8%, at 427.85 pence.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

February 01, 2024 05:16 ET (10:16 GMT)

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