Battered South32 could be a winner from Glencore’s meltdown

As Glencore cuts production, investors are considering the effect on BHP’s latest spin-off.

Summary: Glencore, under pressure to service its debts, is cutting production. This has a beneficial effect for South32, although building confidence in this business will take time. Prices of its principal commodities have fallen since listing, although the company’s light debt load gives it a competitive advantage.

Key take-out: Investors dumped South32 shares in the weeks after it listed but since have been slowly warming to the company.

Key beneficiaries: General investors. Category: Mining stocks.

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