Glencore drops again as cobalt mine is shuttered
Miner Glencore has seen £16bn wiped from its value since the stock hit a year high in April.
And its run of bad luck continued yesterday, with shares closing down another 0.9pc, or 2.05p, at 229.3p. Falling earnings and the company’s decision to halt production at its cobalt mine were behind the latest decline.
Profit for the six months dropped 32pc to £4.6bn, which missed City forecasts, while the prices of zinc, copper, coal and lead fell between 11 and 20pc in the period. Cobalt, the magic battery metal that was supposed to power the electric car revolution, fell 58pc in value, which perhaps explains why Glencore is shuttering its mine in the Democratic republic of Congo.
rivals such as rio Tinto, BHP and Anglo American have all been boosted by higher iron ore prices recently, a commodity to which Glencore has less exposure.
Because iron ore prices are so high, Chinese mills have been unable to buy without the prospect of producing steel at a loss, and the effects of the trade war have reduced demand.
And that’s wiped around 15pc from the value of the miners in just over a fortnight.
There was another day of pain for Sirius Minerals, which lost 29pc of its value on Tuesday after it delayed a crucial bond issue.
it is developing a giant north Yorkshire potash mine, and fell a further 11.1pc, or 1.16p, to 9.24p after German investment bank Berenberg downgraded it.
it reckons the risks of investing in Sirius outweigh the reward.
The FTSE 100 nudged into positive territory following a run of losses that has wiped 350 points off the blue- chip index. The benchmark ended up 27.01 points at 7198.70.
Worries over a trade and currency war have pushed the value of gold above $1,500 an ounce, a level last seen in early 2013.
A surge in profits was followed by a rise in the share price of the pensions buyout specialist
Phoenix Holdings, up 2.7pc, or 18p, to 674,5p.
Ahead of Phoenix on the Footsie leader board was Just Eat – up 6.8pc, or 50.4p, to 789.8p – as the market digested and gave a fourstar rating to plans to merge with Dutch rival Takeaway. Just eat is a top pick of analysts at the London branch of royal Bank of Canada, which nevertheless cut its price target 70p to 830p.
Rolls-Royce continued to feel the selling pressure following Tuesday’s results as the jet engine maker fell 3.8pc, or 29p, to 730p. JP Morgan yesterday cut its target price 50p to 600p. Steam control specialist Spirax
Sarco took a biffing amid fears of a second-half slowdown. it tumbled 6.4pc, or 550p, to 8060p.
Ultra Electronics – up 11.4pc, or 212p, to 2068p – was a lot more chipper about its prospects as it said its order book had swollen beyond £1bn. And roadside barriers specialist
Hill & Smith has pulled out of its recent dive, rising 7.8pc, or 82p, to 1131p on the back of its half-year results. That followed a 7.6pc fall in the stock over the previous month.
Tech minnow Feedback which fell 27.3pc, or 0.45p, to 1.12p, confirmed online speculation that it was considering raising funds for its clinical message app, Bleepa. Frontier Smart Technologies tumbled 11.3pc, or 3.5p, to 27.5p after it revealed the downside to a bid approach – costly advisory fees of £370,000. Perhaps more alarmingly, it said it was in talks with its lender, Clydesdale Bank, over its banking covenants.