(Minews) - Glencore Xstrata’s metals and minerals business saw underlying earnings increase 5% year-on-year in 2013 and sees emerging markets and North America driving demand in the coming years.
The division’s adjusted earnings before interest, taxes, depreciation and ammortisation (Ebitda) were $8.8 billion last year, the company announced on Tuesday March 4.
The Switzerland-based trader sees production growth across its base metals projects.
Copper“A significant reduction in scrap availability coupled with strong Chinese demand saw its cathode consumption jump almost 1 million tonnes to more than 9 million tonnes in 2013,” the company said, adding that many consumers chased spot cathode premiums to record or near-record levels across all key consuming regions.
“More than half of the London Metal Exchange’s cathode stocks are currently cancelled for withdrawal, suggesting further declines beyond the current low levels,” the company said.
“Similar Chinese demand growth rates are anticipated in 2014, driven by additional grid infrastructure and residential construction spending as well as the commissioning of an estimated two million tonnes of new rod capacity,” Glencore Xstrata said.
The company expects a strong global cathode demand in 2014 to be supported by improving economic conditions in the developed world, driven primarily by the USA and ex-China Asia. It also sees support from Europe, which is expected to post demand growth for the first time since 2010.
The company cautioned about copper mine supply risks going ahead. “Growth over the next two years is largely reliant on greenfield sources that carry significantly higher timetable risk, especially as many face challenging geographical backdrops,” Glencore Xstrata said.
“Beyond the copper projects in construction and commissioning this year and next, a lack of large high-quality mine projects from 2015 onwards is expected to shift the market back into structural deficit, particularly given the number of mine closures that are forecast over the second half of this decade,” the company added.
