Glencore shares outlook as nickel and copper prices tumble

The Glencore ( LON:GLEN ) share price has fallen sharply this month as trade focuses on falling copper prices. The stock sank to a low of 465 cents on Tuesday, down more than 8% from its high point this year.

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Volatility in the commodity market

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Glencore’s share price has fallen heavily as investors focus on happenings in the commodities market. Copper has fallen more than 12% from this year’s high point, even as investors expect strong demand this year. In a note this week, Deutsche Bank analysts said copper will rise to $9,000 a ton in the long term.

Glencore benefits from rising copper prices as it is one of the largest producers. Its most recent production report showed it produced 239 kt of copper compared to 244.1 kt produced in the same period in 2023. It expects to produce between 950 and 1,010 kt of copper this year.

Other Glencore assets have faltered in recent weeks. Nickel has fallen more than 17% from its high point in May, when it soared amid Catalan protests. Cobalt, zinc and coal prices have been a bit volatile.

Glencore’s share price also collapsed after BHP abandoned its plan to acquire Anglo American, one of the mining sector’s largest companies. His goal was to merge Anglo’s copper assets in a bid to create the largest copper mining company.

At one point, it was hoped that Glencore would come along and bid for the company in an attempt to gain market share. It’s unclear whether Glencore has the financial resources needed to engineer such a complex deal given that it has more than $32 billion in debt.

I believe Glencore is one of the best mining companies to invest in due to its diversification. It has a large presence in key raw materials such as coal, copper, zinc and nickel. Above all, the company has a large commercial business, where it competes with the likes of Vitol and Trafigura.

Just this week, Glencore said it will replace Trafigura as the supplier of crude oil to the Lindsey refinery. This announcement came a month after the joint venture between Glencore and PT Chandra Asri Pacific purchased an oil refinery in Singapore.

Glencore share price predictions

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TradingView GLEN chart

The daily chart shows that the Glencore share price has been in a strong downtrend over the past few weeks. It fell below the crucial support level at 473.35 pence, its highest point in December and September last year.

Glencore plunged below Woodie’s pivot point. Furthermore, the two MACD lines and the histogram moved below the neutral level. The Relative Strength Index (RSI) fell below the neutral point at 50.

Therefore, the stock will likely stay in this range in the short term and then stage a strong comeback. I suspect it will recover and retest 506p’s year-to-date high when it releases first-half results on August 7.