Glencore expects to make more money in six months than it typically generates from its marketing business in an entire year as commodity traders profit from soaring prices and volatility following Russia’s invasion of Ukraine.

The Swiss-based company said on Friday that earnings in its marketing business for the first half of the year were likely to exceed $3.2bn, representing the top of end of the $2.2bn-$3.2bn guidance it had given for earnings across the entire year.

“Our marketing segment’s financial performance has continued to be supported by periods of heightened to extreme levels of market volatility, supply disruption and tight physical market conditions, particularly relating to global energy markets,” the company said in a trading update.

It is the second major commodity trader to reveal soaring earnings from high prices and the redrawing of trade flows resulting from the war in Ukraine. Trafigura last week reported record profits of $2.7bn for the six months to the end of March, up 27 per cent from last year.

Glencore said it expected “more normal market conditions” to return in the second half of the year. Still, it is on course to far exceed the record $3.7bn in earnings before interest that the trading business generated last year.

Citibank said it now expected the trading, or ‘marketing’, division to generate full-year earnings of at least $5bn. In addition to $5bn in dividends expected in 2022 and 2023, as much as $20bn could be returned to shareholders over the next 18 months through share buybacks, it added.

Shares in the London-listed company have risen more than 25 per cent this year, exceeding 500p a share in March for the first time since its initial public offering in 2012. Glencore shares rose almost 2 per cent on Friday.

In addition to shifting millions of tonnes of metals, minerals and oil across the globe, Switzerland-headquartered Glencore is also a leading mining house and a major producer of copper and coal.

Glencore said it had realised particularly high prices for its coal, which has become one of the company’s biggest earners. However, that business was also facing higher costs for diesel, explosives, logistics and electricity, Glencore said.

Activist investor Bluebell Capital Partners has previously called on Glencore to spin off its coal division, arguing that the company’s value would increase if it did not produce the polluting fossil fuel.

Chief executive Gary Nagle has told investors it was in the best interests of the company and “the planet” for Glencore to run down its coal mines over the next 30 years.

Glencore is aiming to cut its total emissions by 50 per cent by 2035 compared with 2019 levels and achieve net zero emissions by 2050, but 24 per cent of shareholders voted against the company’s climate progress report in April.

As a result Glencore must now speak to its biggest shareholders to consider changes to its strategy and provide an update in the next six months.

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