Sunday, June 19, 2011

Is global growth slowing? Accordign to Glencore, Yes, in the short term

Glencore International PLC’s history extends back to 1974 and today it has a global network of mining operation and it is the world's largest commodities trading company (during 2010, it controlled the trading of about 60% of the zinc market, 50% of the copper market, 9% of the grain market and 3% of the oil market). Last week, when the Swiss-based firm announced its earnings for the first time as a publicly traded company, CEO Ivan Glasenberg had the following comments: “We see a pullback in China and it will continue,” and in the U.S., there had been a “slight slowing down”. In the hope that the slowdown is short term, he also said “these are short-term ebbs which we see from time to time” and “we still believe in the underlying strong fundamentals, with demand continuing to grow in Asia, particularly China and India.”

MY TAKE: Given the firm’s global reach in both mining and commodity trading, the CEO’s comments should be heeded. There is also some concern that the timing of the firm’s IPO on May 24, 2011 may be indicative of smart players top ticking the market. NOTE: France’s
President Nicolas Sarkozy is becoming increasingly concerned about the negative economic impact by speculative trading activity among large commodity market players.

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