The world’s biggest miners have spent the past two weeks reporting lower profits, shrinking dividends and a worsening outlook as the year rolls on. Next up: Glencore looks set to buck the trend.
It’s a sharp reversal from previous years. The company had lagged its biggest rivals, largely because it does not mine any iron ore, a commodity that helped supercharge earnings for mega miners BHP and Rio Tinto. But China’s Covid-19 controls have sapped demand for the steelmaking ingredient as investor worries about a global recession weigh on commodity prices more broadly.
“Prices have sharply declined from first-half averages, so these reported results do not reflect the reality of the markets today,” said Christopher LaFemina, an analyst at Jefferies Group. “We are in a stage of the cycle during which prices are falling and costs are still rising. Not a good combination.”
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