Glencore share price pulled back slightly as investors waited for its financial results. It dropped to a low of 315p on Monday, down from this month’s high of 327p. It remains about 56% above the lowest level this year.
Glencore share price drops amid copper weakness
The Glencore stock price has pulled back in the past few days as the copper market weakens. Data shows that the price of copper has tumbled by over 6% from its highest point this month. It remains 38% above its lowest level this year.
The ongoing pullback comes after copper price surged within a few days after Trump threatened a 50% tariff on all imports. Such a move will affect the US, a country that imports most of its copper.
Copper has pulled back as traders book profits after this month’s short-squeeze. This is notable since Glencore is one of the biggest players in the copper business.
Copper, which is seen as a barometer for the global economy, has pulled back as investors react to Donald Trump’s tariffs. He announced a trade deal with Japan last week and another one with the European Union this week.
A key theme that has emerged is that Trump has set a base for a 15% tariff for all goods entering the United States. A 15% tariff is substantial and could lead to a significant economic slowdown.
On the positive side, there are signs that coal prices are recovering, which could benefit Glencore. Data shows that the Australian Newcastle futures rose to $115.50 per ton on Tuesday, the highest level since February this year.
At the same time, coal-fired power generation in Japan, a major coal importer, has jumped to the highest level in ten months. The ongoing coal recovery is important as prices crashed earlier this year.
Analysts at Goldman Sachs believe that coal prices could jump because of the above-normal temperatures in China, Japan, and South Korea. Additionally, recent data indicate that coal inventories in China have been declining since June, potentially leading to increased demand.
Read more: Glencore share price outlook as it shuts key copper mines
Earnings ahead
The next important catalyst for the Glencore share price is its earnings, which will come out on Wednesday this week. The most recent results showed that Glencore’s revenue rose by 6% last year to $230 billion.
However, the company’s adjusted EBITDA metric plunged by 16% to $14.365 billion, while its net loss soared to $1.6 billion. It blamed its losses to the weakness in the energy coal prices. As such, the rising coal prices may help to boost its earnings this year.
The most recent production report showed that its energy coal production dropped by 7% in Q1 to 23.4 metric tons. This decline was offset by a 493% surge in steelmaking coal. Its copper production also tumbled by 30% to 167.9 kilo tons.
These numbers mean that Glencore’s revenues and profits will be lower than in the same period last year.
Glencore share price analysis
GLEN stock chart | Source: TradingView
The daily chart shows that the GLEN share price has rebounded in the past few months, moving from a low of 200p in April to 316p today. It recently formed a rising wedge pattern, a popular bearish reversal sign.
The stock has moved above the 50-day Exponential Moving Average (EMA). It has, however, found substantial resistance at the 200-day moving average.
Therefore, the rising wedge points to a pullback after earnings. If this happens, the next point to watch will be the psychological point at 300p. A move above the resistance at 327p will invalidate the bearish outlook.
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