Glencore Cuts 2021 Guidance on Operational Issues, Export Constraints, Weaker Coal Demand -- Commodity Comment
By Jaime Llinares Taboada
Glencore PLC on Friday cut its 2021 production guidance for
nickel, zinc and coal. Here's what the natural resources company
had to say:
On copper and cobalt:
"Own-sourced copper and cobalt production of 598,000 [metric
tons] and 14,800 tons, respectively, was modestly higher than 1H
"Own-sourced zinc production of 581,800 tons was 31,700 tons
(6%) higher than 1H 2020, mainly relating to recovery from
Covid-related suspensions in 2Q 2020, particularly in Peru."
"Own-sourced nickel production of 47,700 tons was 7,500 tons
(14%) below 1H 2020 due to planned major maintenance at Murrin and
various operational issues at Koniambo."
"Nickel production was constrained by various operating issues
at Koniambo, with a restart of its second production line currently
expected in August."
On gold and silver:
"Own-sourced gold and silver production were, respectively, 3%
and 13% ahead of 1H 2020"
"Attributable ferrochrome production of 773,000 tons was 307,000
tons (66%) higher than 1H 2020, reflecting that mining and smelting
operations were suspended for much of 2Q 2020 due to the South
African national lockdown."
"Coal production of 48.7 million tons was 9.4 million tons (16%)
lower than 1H 2020, reflecting a full period of Prodeco care and
maintenance (3.8 million tons), various movements in the Australian
portfolio, mainly reflecting the continued market-driven supply
reductions initiated in 2H 2020 (5.0 million tons) and reduced
export rail capacity in South Africa (1.4 million tons), partly
offset by the recovery at Cerrejon from its Covid-related
restrictions in the base period."
"Prodeco's care and maintenance and market-driven Australian
supply reductions since 2H 2020 are mainly responsible for a 16%
period-on-period decline in coal production."
"Entitlement interest oil production of 2.6 million barrels of
oil equivalent (boe) was broadly in line with 1H 2020, reflecting
the offsetting effects of the Chad oil fields placed on care and
maintenance in April 2020 and the gas phase of the Equatorial
Guinea project commencing in February 2021."
On 2021 production guidance changes:
"Changes to guidance mainly reflect: lower 2H for zinc, due to a
lengthier expected ramp-up at the recently-commissioned Zhairem
mine in Kazakhstan; extended maintenance at the Koniambo nickel
plant, delaying a return to a two-line processing operation; and
reduced coal production volumes, on account of export rail
constraints and weaker domestic demand in South Africa and a slower
recovery from the Australian market-driven supply reductions
initiated in 2H 2020."
On the marketing business:
"Our marketing business has again performed well, with
constructive market conditions allowing us to raise our full-year
2021 EBIT expectations to the top end of our $2.2 billion-$3.2
billion p.a. guidance range."
Write to Jaime Llinares Taboada at email@example.com;
(END) Dow Jones Newswires
July 30, 2021 03:05 ET (07:05 GMT)
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