Glencore trading business booms in volatile markets

Glencore's trading business boomed in the first quarter as the war in Ukraine caused shortages of some commodities and volatile markets.

The FTSE 100 miner and commodities dealer said production was mainly in line with expectations in the three months to the end of March but was affected by some temporary factors such as constraints at its Katanga copper mine in Congo and Covid-19 absences, particularly in Australia.

Glencore reduced its full-year guidance for copper and cobalt and increased guidance for nickel and ferrochrome. It cut zinc guidance by 9% to reflect slower than expected progress at its Zhairem in Kasakhstan.

The war in Ukraine has caused extreme volatility in commodities markets because Russia is a big producer of products such as oil, coal, aluminium and nickel while Ukraine is one of the world's biggest grain producers. With business booming, Glencore said if first-quarter performance carried on throughout the year its marketing division would easily exceed the top of its earnings target.

Chief Executive Gary Nagle said: "For the most part, the group’s quarterly production was in line with our expectations. Our marketing activities were supported during the quarter by tight physical market conditions and periods of extreme volatility."

The marketing business's long-term guidance range for earnings before interest and tax is $2.2bn-3.2bn per year. Glencore shares rose 2.5% to 491.65p at 08:26 BST.