It's more than likely that the rise we've seen today is because of the amount of short sellers piled into the stock with a mad scramble to now close out positions so any increase doesn't reflect the true sentiment out on the street at present however it does indicate the level of volatility investors can prepare themselves for in the months to come as the company sets course to cut back debt.
The mining company lead by Ivan Glasenberg has seen a slump in stock value because of the downturn in commodities but more so in the price of copper for which they are very exposed.
Glencore rises as much as 72% in Hong Kong, and has still halved this year.
http://t.co/WihURfJgzv pic.twitter.com/QjSy3qJcBz
— Sarah McDonald (@mcdonaldsarahj) October 5, 2015
This is on the back of a drop in demand from China who gobbled up most copper production a few years ago but the game has changed somewhat. With a economy facing structural changes the resultant headwinds has adversely impacted on economic growth dashing all hopes for most of the major mining players.
China used to consume 45% of output from copper producers. Not anymore http://t.co/lTOOmrtah3 pic.twitter.com/I2zFXmS9jW
— The Economist (@TheEconomist) October 4, 2015
The red metal which makes up 28% of Glencore's earnings has gone from bad to worst in recent weeks with the stock following close behind. What is certain is most investors will be watching the copper price closely for any indication of the direction the company could go in. I think its fair to say that the drop that has been experienced may be overdone and in the coming days or weeks we could begin to see the much anticipated bounce that is needed to stabilize things for the time being.
What Happens Next to #Glencore Will Depend on #Copper Prices http://t.co/2Tp5WdSrvy by @AggieMetals @JP_Riseborough pic.twitter.com/v1MMelxv9H
— Javier Blas (@JavierBlas2) October 1, 2015
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