ii view: Glencore profit swollen by Iran war

First-half production update to 30 June

• Copper production up 15% from H1 2025 to 397 kilo tonnes (kt)
• Zinc production down 21% from H1 2025 to 365.6 kt

Guidance:

• Continues to expect annual copper output of 810-870 kt versus 851.6 kt in 2025
• Continues to expect annual zinc output of 700-740 kt versus 969.4 kt in 2025

Chief executive Gary Nagle said:

"We are pleased to report a strong production performance for the first six months of the year, where our key assets largely performed in line with expectations and previously communicated guidance.

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ii round-up:

Mining and commodities trader Glencore (LSE:GLEN) today flagged trading profit that comfortably exceeded City forecasts, with full-year production estimates effectively raised when allowing for a recent mine sale.

Expected first-half marketing, or trading related profits of $3.3 billion (£2.5 billion) are expected to drive estimates for group-wide first-half adjusted profit up by 4-5% to around $10 billion. Analysts had expected half-year marketing profit of $2.5 billion. Disruption caused by war in the Middle likely aided divisional performance.

Shares in the FTSE 100 company rose 4% in UK trading having come into this latest news up by a quarter so far in 2026. The FTSE 100 index is up 8% over that time. Precious metals miner Fresnillo (LSE:FRES) has fallen by close to a quarter year-to-date.

Glencore’s marketing business trades around 60 commodities including oil. Prior to today's announcement, analysts had expected full-year marketing profit of about $3.8 billion.

Copper production for the half year rose 15% to 397 kt. Glencore continues to expect full-year output of 810-870 kt, potentially up from 2025’s 851.6 kt. Copper generates around a quarter of overall profits.

Zinc output for the period fell 21% from a year ago to 365.6 kt. Management continues to expect full-year production of 700-740 kt, a potential fall from 2025’s 969.4 kt. Zinc accounts for almost a fifth of overall profit.

Full-year estimates for coal proved mixed, with energy coal raised slightly and steel making coal marginally lower. Coal accounts for a quarter of overall profit.

Broker Morgan Stanley reiterated its ‘overweight’ stance on Glencore shares post the update. Half-year results are scheduled for 5 August, with a Q3 production update on 29 October.

ii view:

Started in 1974 and merging with Xstrata in 2013, the Baar, Switzerland headquartered company today employs around 140,000 people. The marketing or trading business accounted for close to third of all adjusted profit (EBITA) in H1 2025 with the industrial or mining business making up the balance. Geographically, China, the US, Singapore and the UK all proved key sales generators last year at around a tenth of revenues each. Africa came in at 5%.  

For investors, Glencore’s involvement in coal production may deter some new buyers given coal’s part in climate change. A trade deal between the world’s two biggest economies, the US and China, has yet to be agreed. Previous corruption allegations and legal settlements add to ethical concerns, while exposure to political instability in countries of operation such as Democratic Republic of the Congo and Kazakhstan also warrants consideration.

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More favourably, the trading business provides diversity not seen at other miners. Exposure to metals such as copper, cobalt and zinc, used in batteries, offers exposure to energy transition commodities. A net debt-to-adjusted profits ratio below one as of late December suggests a robust balance sheet, while a forecast dividend yield of over 3% is not to be overlooked.

On balance, and despite ongoing risks, Glencore’s diversity of operations and a consensus analyst estimate of fair value above 620p per share, offer grounds for continued optimism.

Positives:

• Diversity of commodities and operations
• Previous major share buybacks

Negatives:

• Uncertain economic outlook
• The weather can hinder production

The average rating of stock market analysts:

Buy