Glencore PLC (LSE:GLEN) shares were higher after a leading bank reported that the miner and commodities trader is holding its ground in coking coal despite some shifts in the market story.
Citi, in a research note, points out that coking coal prices have swung wildly every few years, often driven by changing narratives about supply and demand.
After the pandemic, strong demand growth from India helped push prices up, but now worries about increased supply from Russia and Mongolia into China are cooling things off.
The American bank states that while the next big price surge for coking coal might still be a way off, the downside risk from current price levels looks limited.
That’s good news for Glencore, which has been boosting its exposure to coking coal by acquiring EVR, a move the company is highlighting with an upcoming site visit for analysts and investors.
Citi expects coking coal to make up a much bigger slice of Glencore’s coal earnings in 2025 and 2026, around 55%. So, while the market cycle may be shifting, Glencore seems well-positioned to ride it out.
The shares rose 3.07p to 286.67p.