JOHANNESBURG/LONDON – Further falls in copper prices might yet undermine the fightback mounted by mining and trading company Glencore after its shares tumbled to record lows this year, analysts said.
London Metal Exchange benchmark copper plunged to $4,590 a tonne on Tuesday, its lowest in more than six years, as fears about slowing demand growth in top consumer China and a higher dollar fueled negative sentiment.
Glencore saw its shares hit a record low at 66.67 pence in September over concerns it was not doing enough to cut its debt to withstand a prolonged fall in copper – its key metal.
Swiss-based Glencore has pledged to cut its net debt from nearly $30 billion to $20 billion by the end of 2016, a plan the company said would allow it withstand copper prices of $4,000 a tonne, as expected by some market players.
The company has also cut copper output to help lift prices.
Glencore’s shares – down 70 percent so far this year – have recovered from record lows but the company is still the biggest loser on blue-chip FTSE 100 index in the year to date as weaker metal prices remain a nagging concern.
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