Glencore Up as it Adds to Metals Empire
NEW YORK (TheStreet) -- Glencore's (GLEN.L: LSE) quarterly results are out and they weren't very good, showing an adjusted EBITDA drop of 17%.
But guess what? The shares rallied almost 6% today. That's because the miner and trading firm is nearing the final clearance from the Chinese government to merge with miner Xstrata (XTA.L: LSE), a deal that has been twice postponed but will launch Glencore to becoming the fourth-largest miner of global base metals.
And it is not their size as a miner that is significant. It is their continuing quest to swallow up mining assets that is most significant, driving their trading and marketing arms. While being only the fourth-largest miner, their prominence in derivative trading is hardly so humble -- already 70% of global zinc trade and more than 50% of global copper trade crosses their desks.
It's that kind of financial dominance that drives the continued acquisition of physical assets. Understanding and managing the physical flow of base metals including zinc, copper, alumina and lead as well as much of the coal and oil trade allows a marketing arm to have a great advantage in crafting and profitably trading the financial commodity markets. It is a complex profit model, but in short, Glencore is working to create an OPEC-like cartel in global base metal trade. See my video above for more about the monster that Glencore is slowing becoming. Follow @dan_dicker This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
