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Glencore shares continue to fall despite commodities boom

Glencore, the metal mining giant that has seen its share price surge by 80% this year, experienced a sharp fall as markets opened on 9 June, continuing a bearish week for mining stocks. Where next for the Glencore share price?

  • The Glencore share price fell 1.19% to 318p as London markets opened on 9 June
  • Glencore's share price has risen more than 80% in the past year
  • A commodities boom has helped raise the prices of metal mining stocks
  • Failure to meet surging demand could weaken Glencore's outlook
  • Ready to trade the Glencore share price? Open an account today

Why are Glencore shares dropping this week?

Glencore PLC, the Anglo-Swiss metal mining company responsible for the productions of most of the world's zinc and copper, has continued its recent losing streak on the stock market. When markets opened on 9 June, the Glencore share price fell by near-2% to 318p at its lowest, following a week of consistently falling prices.

This all comes amid a global commodities boom that has seen demand for the products and goods sold by Glencore PLC skyrocket, as economies and manufacturing roar back to life in the US and China. The surging demand for commodities such as metals has helped to push the price of copper and zinc to near-record levels, helping to lift Glencore's profits following years of low metal prices.

This boom has been responsible for the mining company's bullish year, which has seen the Glencore share price grow a staggering 80% in just 12 months. So, why have Glencore shares been faltering? One major concern is inflation, which may push prices of commodities such as copper and zinc extremely high. Also, fears are mounting that mining giants may not be able to meet growing demand, potentially causing a bottleneck that could have implications for the broader global economy.

What are the future prospects for the Glencore share price?

The future of the company share price depends largely on the future of metal prices. The decline in Glencore's share price began last week on 3 June, when copper prices fell below $10,000 for the first time in a month, and gold prices saw some of the biggest drops all year.

If prices continue to fall, Glencore's revenues will likely see a significant contraction. However, the company is clearly feeling optimistic about the future of its operations. On 8 June, Glencore announced plans to conduct a feasibility study into further expanding operations at Kidd Mine, already the world's deepest base metal mine.

Meanwhile, this morning, 9 June, revealed that Glencore has invested heavily into eco-friendly mining operations in Australia, with the rollout of battery-powered electric loaders. Furthermore, in its recent FY report, Glencore reinstated the dividend and told shareholders that its 2021 revenues would be at the upper end of their $2.2-3.2 billion guidance range, signalling a brighter future ahead.

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