Commodities slump hits Glencore

Plunging commodities prices – sparked by an economic slowdown in China – and record costs to investors to insure exposure to its debt are hammering mining and trading powerhouse Glencore
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Share price (pence)

0 100 200 300 400 500
2011 2012 2013 2014 2015

May 2011: Shares priced at 530p Company valued $59bn

May 2013: Glencore and rival Xstrata merge creating global mining group valued at $65bn

Jan 2015: Copper prices collapse – Glencore’s shares sink 9%

Sep 15, 2015: Glencore sells $2.5bn in new shares, scraps dividends and plans asset sales to cut its $30bn net debt.
Shares close at 134.70p, valuing company at about $27bn

Sep 28: Shares drop by 29% to 68.62p. Company value falls to $16bn

Sep 29: Shares trade around 72p
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As commodity prices fall…
COPPER Down 14% NICKEL Down 17% COAL Down 18% OIL Down 46%
Fall in price in first-half 2015 compared with first-half 2014
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…cost of insuring debt soars
Annual premium to insure $10 million of Glencore debt against default for five years using credit default swaps

Sep 28 $790,000 Jan 2015 $154,000
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Sources: Investec, Markit, Yahoo Finance, Wall Street Journal

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