Glencore’s iron ore marketing business has increased tenfold since its launch in 2008 to 9.3 million tonnes in 2010, up from 900,000 million tonnes.
While the Swiss commodity trader’s share of the global iron ore marketing business grew, the global arena for the steelmaking raw material underwent the largest change in its history as pricing contracts shortened from long-established annual terms to quarterly and even monthly agreements.
The move from iron ore benchmark prices to index-based pricing has facilitated Glencore’s growth in the market, ceo Ivan Glasenberg told reporters last week as the company reported its first-results.
Since its entrance into the iron ore market, Glencore has grown to compete with other major third-party traders including trader Cargill and investment banks Credit Suisse, Deutsche Bank and Standard Bank.
After a disappointing week for post-IPO Glencore, which saw lower-than-expected first-quarter 2011 results and a drop in its share price, the trading house will be hoping that the market starts to focus on its plans in areas like iron ore.