Glencore International PLC, St. Helier (OTCMKTS:GLNCY) was a notable mover during Thursday’s trading session surging by 8% on 7.5 times the 30 day average turnover. Glencore International has been in a strong downtrend forming lower tops and bottoms indicative of strong bearish momentum, seems to have taken support at levels of $2.34.The index measuring momentum continues to point towards strong bearish interest at current levels and shows no signs of a reversal, which is a cause for concern. Traders see the stock facing resistance at levels of $2.93in the near term. The stock trades below all moving averages.
Glencore International PLC, St. Helier (OTCMKTS:GLNCY) has taken steps to reduce its mining operations for FY2016, in favor of raising capital for other purposes. The company announced that it would downsize its Australian mining operations by 80%. The production of these operations would, therefore, be also reduced. Additionally, some reports from the company even reveal the potential sale of current stock piles, instead of searching for new sources. Furthermore, the company administration has also decided to sell its coal mine in South Africa for $136 million.
Glencore is the largest supplier of thermal coal, which is used by power generation companies. However, given the current market conditions, the price of coal has almost halved, compared to 2013. Consequently, the company has been under a lot of pressure regarding financial sustainability of its mines, especially its operations in Australia. The oversupply of commodities is the main reason for this decline. As such, the company has begun downsizing operations and even halting them at few locations for a period of three weeks.
The South African mines of GLNCY, in particular, have narrowly missed closure. The company stated that the output from this project was being sold at a lower value than the production costs. However, the proceeds from the sales of this project would mostly be used by Glecore to pay off debts that had mounted on the mine itself. Had the company delayed the sale, it would have resulted in the loss of 500 jobs in the region.
Glencore has also revealed plans to cut down debt to $18 billion, by the end of 2016. Additionally, the company has also issued its spending outlook for 2016 to $3.8 billion, down by $1.2 billion as compared to a previous estimate.
Glencore International PLC, St. Helier (OTCMKTS:GLNCY) traded a total of 4.5 million shares during the session, to report a hike of 7.82% in its share value. The stock closed at $2.262 at the end of the December 10 session.