Glencore Xstrata is a globally famous multinational commodity trading and mining company with its headquarters in Switzerland. It has a huge global market share in internationally tradeable zinc, copper, grain and oil. Glencore shares are listed for sale through a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange (JSE) and it currently the 6th biggest company by market cap on the JSE. Glencore merged with Xtrata in 2013 to make up the current company.

Glencore is today South Africa’s largest exporter of thermal coal and is also the world’s largest ferrochrome producer. Under the name Glencore International, the company was already one of the world’s leading integrated producers and marketers of commodities. It was previously the largest company in Switzerland and the world’s largest commodities trading company.

Glencore International boasted a 2010 global market share of 60 percent in the internationally trade able zinc market. This was in addition to 50 percent in the internationally trade able copper market, 9 percent in the internationally trade able grain market and 3 percent in the internationally trade able oil market.

The current Glencore Xstrata has a significant portfolio of production facilities all around the world and supplies metals, minerals, crude oil, oil products, coal, natural gas and agricultural products to international customers in the automotive, power generation, steel production and food processing industries.

In a bid to reverse a declining Glencore Xstrata share price, the company plans to increase its market share and portfolio of worldwide activities in the marketing of metals and minerals, energy products and agricultural products and the production, refinement, processing, storage and transport of those products. Glencore hopes that it will further reduce capital investment, to around $3.5bn in the current year. They expect this to be done along with a further $400m of operating cost reductions.

Glencore reported a net loss of $5bn for 2015 (2014: profit $2.3bn) after the impact of write-downs and impairments caused by low commodity prices. Recently, the group raised $1.6bn from asset sales mainly from forward selling precious metals output streams. The remaining asset sale processes are believed to be proceeding well, with $4-5bn of proceeds forecast in the medium term. This is expected to increase investor confidence to buy Glencore Xstrata shares.

The live online stocks chart shows that Glencore Xstrata share price has failed to deliver over the past three years as commodity prices suffered a major down turn. This unfortunate circumstance directly affected Glencore Xstrata share price, revenue and other financial data, and made investors reluctant to buy the shares.

Gelncore Xstrata’s strong history and global scope however makes it a good commodity to buy with the expectation of long-term growth. The share has proven itself as a great performer when global economic growth is strong.

Materials

Metals & Mining

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