Performance stock: Commodity prices pull down Glencore

Most resources-linked firms have taken a hit in recent months as the price of basic materials have tumbled

HONG KONG: Under-pressure miner Glencore surged in Hong Kong Wednesday, more than halving the previous day’s 30% plunge after it assured investors its business was “financially robust”. The firm plunged in London on Monday and then Hong Kong after brokerage Investec questioned its future if commodity prices, which are wallowing at multi-year lows owing to weak demand from a slowing China, fail to recover soon. On Tuesday it released a statement, “Our business remains operationally and financially robust. We have positive cash flow, good liquidity and absolutely no solvency issues”. Most resources-linked firms have taken a hit in recent months as the price of copper, aluminium, iron ore and oil have tumbled. But Glencore has been particularly badly affected because of its huge $30 billion debt load, even after the firm this month raised $2.5 billion via a shares sale as part of a vast plan to rejig its finances.

 

Published in The Express Tribune, October 1^st, 2015.

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