July 27, 2017 / 8:48 AM / in 3 years

UPDATE 1-Glencore lowers 2017 output targets after first half dip

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JOHANNESBURG, July 27 (Reuters) - Glencore cut its 2017 output targets on Thursday after changes in what it extracts at some of its mines, rainfall and maintenance hit production in the first half of the year.

The global miner and trader said copper output for the six months fell 9 percent and nickel was down 10 percent, while zinc production jumped 13 percent and coal rose 4 percent.

At its Antamina mine in Peru, Glencore shifted its focus to ore containing a combination of copper and zinc instead of purely copper which led to a rise in zinc while copper fell.

Glencore said it was lowering its full-year production guidance for copper, lead, ferrochrome, nickel and coal.

And despite a rise in output, its forecast for zinc production was cut to around 1.13 million for the year because it expects to complete the sale of two mines to Trevali Mining in the third quarter.

A decision by Glencore to shut some zinc capacity pushed prices on the London Metal Exchange up 60 percent in 2016, making it the best performing metal that year.

Glencore raised its marketing earnings before interest and tax (EBIT) guidance for the year to between $2.4-$2.7 billion after including its industrial agriculture arm.

Investec and Bernstein analysts said Glencore’s production figures fell slightly short of expectations.

“Overall, we see today’s results as slightly negative,” Bernstein analysts said in a note.

“However, despite the continuing weakness in the second quarter and production guidance cut we remain positive in the long-term.”

Glencore’s shares were slightly weaker at 0832 GMT, while the wider sector rose by nearly 1 percent. (Reporting by Zandi Shabalala and Sanjeeban Sarkar; Editing by Alexander Smith)

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