LONDON (Reuters) - Mining and trading giant Glencore (GLEN.L) 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 CBD3 are down 27 percent this year to about $55,000 (43,144.02 pounds) 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