Glencore shares outlook as nickel, copper prices dive

on Jun 12, 2024
  • Glencore’s stock price has crashed by 8% from its highest point this year.
  • Copper and nickel prices have dropped sharply in the past few weeks.
  • Analysts are bullish on the price of copper as demand rises.

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Glencore (LON: GLEN) share price has pulled back sharply this month as trades focus on the falling copper prices. The stock crashed to a low of 465p on Tuesday, down by more than over 8% from its highest point this year. 

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Volatility in the commodities market

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Glencore’s stock price has crashed hard as investors focus on the happenings in the commodities market. Copper has tumbled by over 12% from the highest point this year even as investors predict strong demand this year. In a note this week, analysts at Deutsche Bank said that copper will jump to $9,000 per ton in the long term.

Glencore benefits when copper prices are rising since it is one of the biggest producers. Its most recent production report showed that it produced 239kt of copper from the 244.1kt it produced in the same period in 2023. It expects to produce between 950-1,010kt of copper this year.

Other Glencore resources have wavered in the past few weeks. Nickel has plunged by over 17% from its highest point in May when it soared amid the Catalan protests. Cobalt, zinc, and coal prices have been a bit volatile.

Glencore’s stock price has also crashed after BHP abandoned its plan to acquire Anglo American, one of the biggest companies in the mining industry. Its goal was to combine Anglo’s copper business in a bid to create the biggest copper mining company.

At some point, there were hopes that Glencore would come in and make an offer for the company in a bid to gain market share. It is unclear whether Glencore has the financial resources needed to engineer such a complex deal since it has over $32 billion in debt. 

I believe that Glencore is one of the best mining companies to invest in because of its diversification. It has a large presence in key commodities like coal, copper, zinc, and nickel. Most importantly, the company has a large trading business, where it competes with the likes of Vitol and Trafigura. 

Just this week, Glencore said that it would replace Trafigura as the supplier of crude oil to the Lindsey refinery. This announcement came a month after Glencore and PT Chandra Asri Pacific’s joint venture bought an oil refinery in Singapore.

Glencore share price forecast

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Glencore share price

GLEN chart by TradingView

The daily chart shows that the Glencore’s stock price has been in a strong bearish trend in the past few weeks. It has crashed below the crucial support level at 473.35p, its highest point in December and September last year.

Glencore has plunged below the Woodie pivot point. Also, the two lines of the MACD and the histogram have moved below the neutral level. The Relative Strength Index (RSI) has crashed below the neutral point at 50.

Therefore, the stock will likely remain in this range in the near term and then stage a strong comeback. I suspect that it will rebound and retest the year-to-date high of 506p by the time it publishes its first half results on August 7th. 

Glencore UK Mining Stock Market Trading Ideas