Glencore International – Trading and Mining Company
Glencore PLC (JSE: GLN) is an Anglo-Swiss international trading and mining company headquartered in Baare, Switzerland. The headquarters for oil and gas are located in London, St. Petersburg, Helier, and Jersey.
The current company was founded on May 2nd, 2013, as a merger of Glencore and Xstrata. As of 2015, it was ranked tenth on the Global Fortune 500 list of the world’s largest companies and came on the Forbes Global 2000 list in 2020. Glencore International was ranked 484th among publicly traded companies in the world.
As Glencore International, the company had already been one of the world’s largest integrated producers and distributors of commodities. It was the largest corporation in Switzerland and the largest commodities trading company. The company had a market share of 60% in internationally traded zinc, 50% in internationally traded copper, 9% in internationally traded grain, and 3% in the international oil market.
Glencore has multiple production facilities worldwide and has served international customers in the automotive, electrical, steel, and food industries with metals, minerals, crude oil, petroleum products, coal, natural gas, and agricultural products.
The company was founded in 1994. The management acquired Marc Rich + Co AG (founded 1974). In 2011, the corporation was listed on the London Stock Exchange and became part of the FTSE 100 index. The company had a secondary listing on the Hong Kong Stock Exchange, but it was withdrawn in January 2018. Glencore’s shares were listed on the Johannesburg Stock Exchange in November 2013.
Qatar Holding LLC is currently the largest shareholder and owns 9.2% of the shares. The second-largest and third-largest shareholders now own 9.2% and 5.1% of the issued shares. The second-largest shareholder, Ivan Glazenberg, is also the CEO of the company.
Glencore is diversified by its products, geography, and activities as a global marketer and producer of commodities. Following are the core investments of Glencore:
Metals and Mining
The company primarily invests in metals and mining. It includes mining of Copper, Zinc, Lead, Nickel, Cobalt, and some other metals and minerals. Glencore is one of the biggest producers of copper in the world. The company produces copper at mining sites in Australia, Africa, and South America. It produces 1.26 million tons of copper in 2020 while it sold 3.4 million tons through its marketing channels.
Glencore is one of the biggest seaborne coal producers and exporters in the world. Their coal is used for power generation, steel making, and some other industrial processes.
The company is a giant marketer of crude oil and other oil products. Glencore also sells natural gas and related products in European markets. In South Africa, the company is a leading supplier of petroleum products through Astron Energy.
Being one of the biggest commodities marketers in the world, Glencore sources its products and commodities physically from its global supplier base and sells in the entire world. It includes a diverse supply chain comprising of the sea, air, rail, and truck transportation. The company focuses on the timely supply of commodities to its customers.
The company recycles a huge variety of electronics to extract precious metals and copper. This helps to support the circular supply chain of materials that otherwise would go to landfills. Glencore has five recycling operations in different parts of the world.
Glencore Business Strategy
The primary objective of Glencore lies in being a leader in decarbonisation, meeting consistent demand for commodities, and responsibly fulfilling the energy requirements. Let’s find the core strategies of the company.
Glencore aims at smart portfolio management. The company prioritises investments in commodities that help in the transition. It focuses on building strategic and reliable sources of commodities.
Glencore strategically aims at reducing coal production gradually and focuses on curtailing the carbon footprints of its operations. The company aims at adopting modern technology and electrification to reduce carbon emissions. Also, the company looks to expand opportunities in green metals.
Corporate Social Responsibility
Glencore creates its great image of being socially responsible by investing in several community projects. The company invests in several healthcare projects, and it also facilitates the people of South Africa in learning skills through training and education.
The company has initiated advertising campaigns to let the people of South Africa know about the company’s contribution towards generating employment and developing the community. The crux of their advertising is to show a win-win situation for the company and the people.
Glencore Stocks Analysis
Glencore (JSE: GLN) has a price to earnings ratio of 24.4, while the dividend yield is 1.43%. Although the figures are not encouraging for those, who care for fundamental analysis. However, the technical picture is quite encouraging. The price of GLN is maintaining a nice rising volume with the price rise, while the 20-day simple moving average is also below the price, pointing upwards. Any technical retracement in price comes with a falling volume. It indicates that buying interest is quite dominant.
Glencore PLC is one such stock that can be considered a nice venture to invest in. The stock prices have posted a solid rise over the past 12 weeks. It reflects that investors are even willing to buy at higher prices. The stock has gained around 8.3% during the past three months.
However, looking at the price trend of the past three months is insufficient as there can be a trend reversal in shorter timeframes. Keeping in view the stock price over the past four weeks, we realize that the company has gained around a 6% rise in the price. It shows that the bullish trend is well intact. Moreover, GLNCY is now around 87% of its 52-week price range. It shows a potential breakout that can occur in the near future.
Glencore PLC is a leading company in the world that deals with commodities mining and marketing. The company emphasizes decarbonisation, acquiring modern technology, investing in green metals, and building a strong relationship with the community. The company has strong financial health, and investors are heavily buying the GLN share as growth prospects are quite high.
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