LONDON, Dec 3 (Reuters) - Mining and trading giant Glencore said on Monday some customers had reneged on contracts for cobalt, a key metal for electric car batteries, contributing to a cut in earnings guidance for its marketing arm.
A presentation released ahead of an investor call said: “Cobalt – some customer contractual non-performance amid weaker H2 pricing conditions”. There was also a time lag between internal purchase commitments and sales activities, it added.
Cobalt prices on the London Metal Exchange are down 27 percent this year to about $55,000 per tonne and have tumbled from a peak near $100,000 earlier this year.
In the same presentation, Glencore cut its 2018 guidance for its operating profit from its marketing division to $2.7 billion, plus or minus $100 million, from previous guidance of the top half of $2.2 billion to $3.2 billion.
Other reasons for cutting the guidance were basis risk from alumina contracts and accounting treatment of its agriculture products, the presentation added. (Reporting by Eric Onstad and Pratima Desai Editing by Alexander Smith)