Its shares have benefited from rises in coal and zinc prices, but copper lags behind
LONDON— Glencore PLC on Thursday reported lower production of copper, coal and zinc in the year’s second quarter as it continued to try to lift prices through output cuts, though results have been mixed.
The Swiss-based mining and trading giant is among the world’s largest producers of those metals, so with commodity prices and the company’s shares plumbing new depths last year, Glencore launched a plan to shut in production. That’s something Chief Executive Ivan Glasenberg had long urged other miners to do.
“This material can be dug out of the ground at a later stage when you get better returns and you get the required returns that you want from these assets,” Mr. Glasenberg said in March.
It’s unclear how well Glencore’s gamble has paid off. In September, the company announced plans to shut two African copper mines over an 18-month period, reducing copper output by 400,000 tons. The cuts contributed to a 3.2% drop from last year in the company’s copper output. to 368,000 metric tons in the quarter ended June 30.
Copper prices haven’t kept pace with the wider rally in commodity markets though, gaining about 3% so far this year. The company has had better results with zinc, a metal used in the manufacture of steel and brass and a commodity that Glencore has long dominated.
For the rest of this article, click here: http://www.wsj.com/articles/glencores-production-cuts-dont-always-raise-commodities-prices-1470939619