Glencore coal earnings to beat estimates as Citi eyes price rally Proactive uses images sourced from Shutterstock
Glencore PLC (LSE:GLEN) is now rapidly approaching a critical market juncture, as Citi flags a potential coal price rally that appears set to outpace increasingly cautious consensus earnings estimates across the City.
The shares traded at 601.20p, up 1% during Thursday’s intraday session, as the influential broker detailed why the long-anticipated global commodities resurgence has been delayed.
At the heart of the update is a clear acknowledgement that historically elevated thermal coal stockpiles across both India and China have so far effectively suppressed the expected global market rebound.
That stubborn inventory overhang is finally clearing, with Indian stockpiles shrinking to just nine days of use and pushing dangerously close to the critical threshold at which safety-stock-driven bids emerge.
Those rapidly falling stockpiles, coupled directly with widening spreads between thermal coal and liquefied natural gas prices, are currently laying the foundations for a sustained upward swing in broader commodity valuations.
Beyond inventory levels, the investment bank highlighted that declining Indonesian exports and safety-related coking coal shutdowns in China will further squeeze global supply chains just as El Niño weather conditions intensify.
These tightening supply dynamics currently leave the sprawling London-listed commodities giant positioned to generate a massive 10% free cash flow yield at prevailing spot prices, underscoring the sheer underlying profitability of its operations.
Set against this notably bullish backdrop is a surprisingly cautious $6 billion consensus forecast for projected financial year 2027 coal earnings, a baseline figure the broker firmly believes looks remarkably soft compared to its own conservative $8.4 billion estimate.