Miner and commodities trader Glencore has posted a 29 percent fall in first-half earnings. As Amy Pollock reports it's been hit by sliding metal and oil prices and expects capital spending next year to be lower than this year.
Commodities giant Glencore is not having a good year. A 29 percent fall in first half earnings in 2015 will be followed by lower capital spending of $5 billion in 2016. The Swiss-based miner and trader has been hit by steep falls in the price of its staples like oil and copper. Something partly driven by oversupply worldwide. Jane Foley is at Rabobank. (SOUNDBITE) (English) SENIOR FX STRATEGIST AT RABOBANK, JANE FOLEY, SAYING: "We could consider for instance, coal, we could consider iron ore, we could look at copper...I think it is fair to say there is a bit of a supply glut in all of those, so slower growth from China clearly comes back through into the producers." It's not just Glencore suffering. Chinese demand for metals is dwindling on a bleak growth outlook, meaning prices are unlikely to pick up. So says Seven Investment Management's Justin Urquhart Stewart. (SOUNDBITE) (English) SEVEN INVESTMENT MANAGEMENT'S JUSTIN URQUHART STEWART, SAYING: "Until there is a consistent increase in demand from China then at the moment I think you're still going to see continued weakness there so no need to rush back into it. Whether there is much further to fall - no I think we've reached the level, but I can't see any more reason for the bull market to come back in yet." Although Glencore's trading arm has cushioned the blow from price falls in the past, this time investors are wary. Shares are down by about 40 percent so far this year, underperforming its rivals Rio Tinto and BHP Billiton.