Glencore trading division enjoys boom in earnings

Traders at commodities giant Glencore managed to play volatile global markets well enough to post a whole year’s worth of earnings in just six months.

The business said that its marketing division will earn 3.2 billion dollars (£2.6 billion) before interest and tax (EBIT) in the first six months of the financial year.

It is the top end of the 2.2 billion to 3.2 billion dollars (£1.8 billion to £2.6 billion) that the unit aims to make in a year.

But the business warned shareholders not to expect the stellar performance to continue.

“We currently expect more normal market conditions to prevail in the second half of the year,” it said.

The Anglo-Swiss mining and commodity giant saw its shares rise 2.4%  following the news.

Glencore attributed its soaring profits to “extreme levels of market volatility, supply disruption and tight physical market conditions, particularly relating to global energy markets”.

Glencore has been positioned to benefit from the fallout of Russia’s invasion of Ukraine which created wild swings in markets for metals and minerals, which the company specialises in trading.

It is also set to benefit from the green energy transition.

The shift to a zero-carbon economy by the second half of this century will require many of the metals that Glencore sells, including copper, nickel and cobalt.

Aluminium could also serve as a useful commodity for the firm, due to its importance in the transportation sector.

The news comes weeks after the company revealed it might have to pay out more than a billion dollars after pleading guilty to charges brought in the UK, the US and Brazil.

As part of their payouts the firm said it would likely pay penalties of £701 million dollars (£560 million) to resolve bribery investigations and £486 million dollars (£388 million) to resolve market manipulation investigations by the US Department of Justice and the Commodity Futures Trading Commission.

Glencore will release its half-year production report on July 29 and its financial results on August 4.