Glencore basking in global unrest as it eyes move away from London Stock Exchange

Glencore views potential disruptions arising from global trade tariffs or other geopolitically situations as positive for its business.

The Swiss trading giant is trying to revel in the unknown rather than to second guess what is likely to happen next.

Chief executive Gary Nagle said: “Uncertainty is positive, and we capitalise on it. Uncertainty creates opportunities. Uncertainty creates arbitrage opportunities; they create dislocations in the market and when that happens, we do well.”

Nagle highlighted how a potential resolution between Ukraine and Russia could lead to “commodity intensive” rebuilding efforts in Ukraine, as well as put Russian material and business back in the market, sanction permitting of course.

He admitted, during the company’s results presentation, that although long-term trade tariffs may not be good for global growth, in the short term, volatility and heightened uncertainty raise the company’s ability to make gains.

“This is not a bad thing for us at Glencore. For us to divert cargoes, that is the nature of Glencore,” Nagle said.

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“We can do that at any moment, at any time. More volatility is better for us because we’re naturally positioned for that.”

He also explained how trade tariffs were a one-time hit to inflation and naturally would not be good for demand and commodities, and thereby for producers.

“In that case, we are prepared to make changes to our commodity supply portfolio in order to respond to those changes,” Nagle added.

Results dip, stock exchange switch

Despite its positive disposition on market uncertainty, the company saw a 6% drop in profit to $14.4bn last year.

This is down from $17.1bn in full year 2023, due to lower power-generating coal prices.

As a result, the company’s shares on the London Stock Exchange fell by 7% during early trading on Wednesday.

Glencore’s primary listing in the UK is at risk as the company is actively considering moving its shares elsewhere.

“We’re not saying the London Stock Exchange is bad. But asking, ‘is there a better exchange for us to trade our securities?’… and we move our listing to a jurisdiction that will be more appropriate and give us value that we want,” Nagle stated.

Although no date for the move was confirmed, Nagle admitted that a US stock exchange was the lead candidate.

On addressing the company’s rumoured merger with iron ore giant Rio Tinto, Nagle added: “This company was built on M&A, it’s in our DNA.

“At the right value, there’s something to be done … we’re always open to opportunities.”

Bullish on coal prices

Looking ahead, Glencore said it remained “very bullish” on steel-making coal prices over the next six to 12 months.

“We’ve seen continued steel exports out of China through the course of last year, over 100m tonnes, and that is effectively an export of steel-making coal,” the company said.

Chinese seaborne steel exports soared to a record 115.4m tonnes in 2024, according to Clarksons, way above its previous record of 110.8m tonnes in 2015.

Glencore’s total capital expenditure on lease recognition, primarily for its fleet, totalled $211m in 2024, with steel and energy coal accounting for $65m, although no comparisons for 2023 were detailed.

“We do believe that there’ll be a reduction of steel exports out of China [this year], associated with growth in production in places like India, [but] we believe the market will come back into balance and we see an upside for steel-making coal [prices],” Glencore said.

The average price of premium Australia metallurgical coal was $241 per tonne in 2024, down from $296 per tonne in 2023, according to Glencore.

Meanwhile, for power-generating coal in Australia’s Newcastle, the average price for 2024 was $135 per tonne, down from $173 per tonne from 2023.

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