Glencore International PLC, St. Helier (OTCMKTS:GLNCY) lost 3.71% in the last trading session following a series of positive days in the last week. The rise in the last week was not very impressive and may be retraced in the short term. The volume of the day at 2.7 million against the daily average of 1.4 million only favored the short term bears too. On the other hand, the long term chart attached clearly shows that the technical projection target from the long term range breakdown has already been achieved at the 52 week low around $2.03 levels. Just this fact increases the probability finding a long term bottom there.
Operations at Glencore International PLC, St. Helier (OTCMKTS:GLNCY) Nickel Rim South mine in Ontario are expected to resume in coming days. The site was shutdown on Tuesday after a worker was killed due to an accident at worksite. It was the first fatality in Sudbury in 2015 and also the first fatality at the mine. The company, which also runs the Fraser mine, Sudbury smelter and Strathcona mill in Sudbury, stated the Ontario Ministry of Labour probe is ongoing.
The highlights
Mining firms including Glencore had no choice but to reduce production of higher-cost businesses after slowing demand in China prompted plunge in metal prices. The country, which uses about 40% of the global copper and half its aluminum, is estimated record slowest growth rate in a quarter of a century. It consumers most of commodities and therefore an accommodative monetary plan has to be constructive for mining stocks.
Glencore, which is planning to reduce its $30 billion debt by a third, has nearly doubled since making a record low in September as it rebutted worries pertaining to its ability of debt repayment. Ivan Glasenberg, the CEO of the commodity trader and miner, stated that no one can predict commodity market in China. The nation’s 1-year lending rate will decline to 4.35% from 4.6% and the 1-year deposit rate will drop to 1.5% from 1.75%.
The future ahead
Glencore has been out of flavor in 2015, with its stock price plunging sharply on the national exchanges. With the market being nervous on its financial standing, the stock now trades on a PEG ratio of 0.5 and has a valuation below book value. As a matter of fact, with Glencore trading on a lower PEG ratio, it seems to provide a relatively extended margin of safety. Certainly, the debt levels remain a matter of concern for investors.
