Glencore upgraded to ‘buy’ by UBS amid strong trading and commodity growth

UBS has upgraded Glencore PLC from ‘neutral’ to ‘buy’, raising its price target to 650p from 620p. The upgrade follows a period where shares fell approximately 15% due to economic concerns, coal price fluctuations, and a legal dispute with Radiant World. Glencore has characterized the Radiant World claims as meritless, stating its exposure is below US$500 million.

Analysts cite several drivers for optimism, including a strong performance by Glencore’s trading arm, which recorded a second-best ever first-half operating profit of US$3.3 billion. Additionally, key commodity prices for thermal coal, steelmaking coal, and zinc have risen by approximately 30% this year.

Future growth is expected through increased copper output at the Collahuasi mine in Chile and potential asset sales exceeding US$10 billion. These possible disposals include a stake in Congolese copper assets, a holding in Bunge, and a stake in Kazzinc. Glencore remains a major global commodity trader and a top five copper producer with a vertically integrated model spanning mining, trading, and logistics.