Glencore (GLNCY.US) reported a 86% surge in core profits for the first half of the year, driven by a combination of trading operations and rising copper prices.

Glencore Plc announced its half-year performance report on Wednesday, showing a significant profit surge driven by a spike in core commodity prices and one of the best performances ever recorded by its trading division. Global commodity traders earned excess profits, largely influenced by rising energy prices due to the war in Iran. The report indicated that Glencore's core earnings (EBITDA) for the first half of the year reached $10.1 billion, a year-on-year increase of 86%. The company also announced an additional $1.5 billion return to shareholders, which includes $1 billion in extra dividends and a $500 million share buyback program. In addition, Glencore announced plans to seek a secondary listing in Australia. CEO Gary Nagle said, Investor demand for our listing in Australia is high. The Australian capital market has a deep pool of funds and a profound understanding of the resources sector. Geopolitical conflicts have led to a trading bonanza, with coal business significantly contributing. The ongoing Middle East conflicts have caused persistent disturbances in the energy market, especially since the Strait of Hormuz has effectively been blocked since late February, resulting in a backlog of crude oil and refined products in the Persian Gulf. The global energy supply chain has been severely impacted, and regional smelter attacks have also affected the aluminum market. Buyers have been forced to rush to alternative sources, such as the United States, to procure substitute oil products, creating substantial arbitrage opportunities for traders. Meanwhile, Ukraine has recently carried out multiple attacks on Russian fuel facilities, further tightening refined oil supply and pushing refining margins to historic highs. In this context, Glencore's trading business profits reached $3.3 billion in the first half of the year, with coal business revenues also significantly increasing by 35% to $2.4 billion. As one of Glencore's primary profit sources, coal continues to benefit from this round of energy crisis, while copper prices hit historic highs due to multiple factors, including the AI boom and trade tariffs. After failed merger negotiations, alternative paths are being sought, and asset sales are ongoing. The performance announcement and decision to pursue a listing in Australia come six months after the collapse of merger talks with Rio Tinto Group. The two companies had previously explored merging to create the worlds largest mining giant, but negotiations ultimately broke down due to disagreements on the premium Rio Tinto was to pay. In recent years, Glencore has been exploring new avenues to improve liquidity and valuation. The company had considered an initial public offering in the United States last year but later abandoned the plan. Peers Rio Tinto and Anglo American Plc have previously reported strong performance thanks to rising metal prices, but Glencore has gained additional excess returns through its trading business and coal exposure. Currently, Glencore is advancing plans to divest some assets. The company is negotiating with U.S.-backed Orion Resource Partners to sell part of its stake in African copper operations while also discussing the sale of its equity in Kazakhstan's Kazzinc company.