Glencore maintains expectations after mixed first quarter

Glencore said production in its first quarter was largely in line with expectations across all commodity groups on Thursday morning, keeping its full year guidance unchanged from what it presented in February.

The FTSE 100 miner said own-sourced copper production at 345,400 tonnes was 21,300 tonnes higher than in the first quarter of 2017, reflecting the commissioning of the first phase of Katanga's whole ore leach project in December.

That was partly offset, however, by the impact of maintenance at the Mount Isa smelter and Alumbrera's expected decline as it moved towards end of mine life.

Own-sourced zinc production at 242,700 tonnes was 36,500 tonnes, or 13%, below the first quarter of last year, which Glencore’s board said mainly reflected the disposal of Rosh Pinah and Perkoa in August.

Adjusting for that, production was reportedly in line.

Own-sourced nickel production at 30,100 tonnes was 5,100 tonnes, or 21%, higher than the comparable period, which Glencore put down to the continuing stabilisation and ramp-up of Koniambo's processing plant - where both production lines were now operational - as well as stronger performances at Murrin and INO.

Attributable ferrochrome production of 409,000 tonnes was 31,000 tonnes, or 7%, below a year ago, mainly reflecting furnace downtime and challenges with the subsequent restart.

Coal production of 30.7 million tonnes was in line with the comparable period last year, which was chalked up to a stronger contribution from the Australian thermal portfolio - impacted by adverse weather in the base period - but offset by weather-related reductions at Prodeco.

Full-year coal production guidance was unchanged, and included the largely offsetting impacts of the Hail Creek joint venture acquisition, expected in the second half of 2018, as well as lower production now expected from Prodeco for 2018, before returning to higher levels in 2019.

Glencore said its entitlement interest oil production of 1,156,000 barrels was 209,000 barrels, or 15%, lower than the first quarter of 2017.

“This was in line with the fourth quarter of 2017, as natural field declines in Equatorial Guinea were offset by increasing production in Chad from the drilling campaign that started in the second half of 2017,” the Glencore board explained in its statement.

“Full year 2018 marketing EBIT [is] expected to be within the top half of the $2.2bn to $3.2bn long term guidance range.”