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Glencore Share Price Cools on Production Cost Inflation

The price of Glencore shares has drifted from highs near 400p to trade at 350p but the cooling in price may be a technical correction as inflation remains heated.

Glencore’s marketing business has this week raised its full year adjusted earnings forecast to over $3.2bn, the mining firm’s CEO Gary Nagle said in a third quarter production update.

It follows Glencore’s recovery from reduced production as global energy markets have begun to rebalance amid soaring cost inflation.

“The asset base has largely performed in line with our expectations and our full year production guidance remains unchanged. Notably, as energy markets have improved, we are recovering from the market-driven production cuts initiated within our Australian coal portfolio in H2 2020,” Nagle said.

“Basis Marketing’s continued strong performance, we now expect full year 2021 Adjusted EBIT to exceed the top end of our $2.2bn to $3.2bn per annum long-term guidance range.”

The last week has seen higher inflation in Australia, Germany, and the broader eurozone and this will continue to affect Glencore. Inflation will keep demand solid for commodities, but production costs are also hitting the company.

Glencore Share Price Analysis

Glencore shares saw a high near the 400p level this month but have since faded to test the 50 moving average at 350p. The October surge could be a blow off move higher and the market could still drift lower to find a solid base. The 340p level was a previous high and could be another support level.

Glencore Price Chart (Daily)