Glencore trading profit surges on Middle East war

Key Facts

Expected H1 marketing earnings: $3.3 billion
Marketing earnings in 2022 (record): $6.4 billion
Marketing earnings in 2024 (full year): $2.9 billion
Annual marketing target: $3.5 billion
Trafigura H1 profit (to March): $4.1 billion
Copper production change: +15% year-on-year

Background

Glencore, the Swiss commodities trader and miner, reported on Wednesday that its marketing division, which includes energy trading, is expected to post first-half earnings of about $3.3 billion. This would be the second-highest half-year result since the record profits of 2022, according to a production report cited by the Financial Times.

The division earned $2.9 billion for all of last year and a record $6.4 billion in 2022, as reported by Bloomberg News. The latest figure is roughly $1 billion above analysts' expectations, the FT said.

Glencore has not provided updated full-year guidance, but the first-half result is already within reach of the top end of its $3.5 billion annual target for the marketing division.

Current situation

The surge in trading profit is attributed to the Israel-Iran conflict, which effectively closed the Strait of Hormuz in late February, disrupting crude flows. Attacks on regional smelters have roiled aluminum markets, and Ukrainian strikes on Russian fuel plants pushed refining margins to records.

Rivals have also posted strong results. Trafigura reported a profit of $4.1 billion for the six months to March and paid a record dividend, while Mercuria's net profit doubled over the same period to its second-highest first-half total ever.

In addition to trading, Glencore reported copper production up 15% year-on-year, though it trimmed steelmaking coal guidance and said copper costs ran higher than expected.

Marketing earnings comparison
Period	Earnings
H1 2026 (expected)	$3.3 billion
Full year 2024	$2.9 billion
Full year 2022 (record)	$6.4 billion

Figures as reported by Bloomberg News and the Financial Times.

Impacts

The strong trading results are likely to boost Glencore's share price, according to Barclays analyst Ian Rossouw, who said he expected a positive market reaction. RBC's Ben Davis called it 'curious' that Glencore gave no further marketing guidance for the year, as reported by the FT.

The unresolved conflict could extend trading opportunities into the second half, according to Bloomberg Intelligence analysts. This suggests that energy traders may continue to benefit from volatile markets.

Investors and analysts will be watching Glencore's full first-half results, due next week, for more details on the performance of its marketing division and other business segments.

Future outlook

Scenario analysis: The possibilities below are not certain predictions.

If the Middle East conflict remains unresolved, trading opportunities may persist into the second half, potentially allowing Glencore and its rivals to sustain elevated profits. However, any de-escalation could reduce volatility and dampen trading gains.

Glencore's ability to meet or exceed its $3.5 billion annual marketing target will depend on market conditions in the coming months. If the conflict continues, the company could surpass the target, but if conditions normalize, results may fall short.

The company's copper production increase and higher costs may also influence its overall financial performance. Analysts will be looking for clarity on cost trends and production guidance when full results are released.

Source: miningmx.com

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