LONDON – 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% 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.