London (Reuters) - Mining and trading firm Glencore on Thursday reported a decline in copper, nickel and cobalt production in 2023, and hinted at further declines this year.
Copper, nickel and cobalt are the materials used to make electric vehicles, which are an important part of the energy transition.
"Production challenges have become common in the sector and the lack of supply growth for most commodities in the mining sector should lead to higher prices over the next 12-plus months," said analysts at Jefferies.
"Over time, higher prices should offset the negative impact of lower Glencore production," they added.
The London-listed company reiterated that it expects profits from its trading division to reach $3.5bn in 2023, above its long-term guidance range of $2.2bn to $3.2bn.
Glencore said its 2023 copper production was 1.01 million tonnes, down 5 per cent from 2022, compared with previous guidance of 1.04 million tonnes.
The company now expects to produce between 950,000 and 1.01 million tonnes of copper this year, reflecting the sale of its Cobar mine in Australia.
Analysts had expected a copper supply shortage this year amid signs that supply may not be as strong as previously thought. The move came after Panama ordered the closure of First Quantum's 350,000 tonnes a year copper mine, while major producers Anglo American, Codelco and Vale Base Metals cut their copper supply forecasts.
Glencore's nickel production for 2023 was 97,600 tonnes, below its revised production forecast in October, partly due to the shutdown of its Murrin Murrin mine in Australia for maintenance. The company expects to produce about 80,000 to 90,000 tons in 2024.
Other producers, including BHP Billiton, the world's largest listed miner, have suspended nickel projects in response to falling prices.
Glencore will produce 41,300 tonnes of cobalt in 2023. The company expects to produce between 35,000 tons and 40,000 tons this year.
