Swiss commodities trader Glencore International PLC (LON:GLEN) painted a rosy outlook for the worldwide demand for raw materials this year, as China and the U.S. help offset the impact of the slump in Europe.
In a first-quarter report on raw materials extracted — but not its profits — the world’s largest commodities trader said physical demand remains “healthy,” although “precise conditions vary by location."
On the production side, first quarter output from its own sources increased by 11% for copper, 2% for lead, and 59% for tin while gold (including gold equivalents) fell 2%, nickel dropped 13% and cobalt fell 3% in the first quarter compared with the same period a year-ago. First quarter coal output from its Colombian mine Prodeco was up 10% on the year.
Glencore said its "major growth projects remain overall on schedule and within budget."
The company’s comments came ahead of its first shareholder meeting scheduled for later today and after a sharp drop in commodities prices over the last week among concerns about the economic health of the Eurozone.
Referring to the imminent merge with Xstrata, the company said the two miners expect the merger to be completed during the third quarter of this year, with savings of “at least $500 million in 2013.”
In March, Glencore reported a 7% rise in full-year profit to $4.06 billion for 2011, citing rising prices for key raw materials and strong demand in developing countries.
Glencore’s positive outlook is in line with other commodities market players’ views. Mitsubishi, Japan’s largest trading company, said yesterday it expected higher coal and steel sales as well as oil prices averaging $120 a barrel to drive record profits.