Commodities producer and marketer Glencore International says that all of its major growth projects remained on schedule and within budget in the first quarter of 2012.
"Glencore has traded well across all segments of its business in 2012. Physical demand for commodities remains broadly healthy across the globe, although precise conditions vary by location [...] It remains our view that available global inventories are generally low, both on exchanges and within supply chains," the statement said.
Demand in the US has continued to strengthen in areas such as automobiles and aerospace, Chinese demand continues to be healthy, while European conditions remain generally weaker, the group said.
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In the marketing of metals and minerals, the group said that flat prices and physical premia for core metals were generally healthy during the first three months of the year, "although, in some metals, the latter moved in opposite directions in OECD versus Chinese markets, reflecting differing short-term inventory conditions."
The group said that its committed liquidity headroom at March 31st was in excess of $6.5bn, similar to levels at the end of 2011.
Glencore, which proposed a merger of equals with mining group Xstrata in February, said it expects receipt of all regulatory approvals to enable completion by the third quarter quarter of this year, as previously announcement. Shareholder meetings to approve the merger are expected to be convened in early July.
"The proposed merger with Xstrata will, if successful, provide immediate synergy benefits including removing the constraints which the current ownership structure imposes. Together we have quantified the measurable pre-tax synergies as being at least $500m in 2013. In addition, both parties see material scope for portfolio optimisation to drive more efficient capital allocation across the combined entity," the firm said.
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