Glencore PLC's lower production guidance for key commodities, especially copper, and no major expansionary projects in place, imply a weaker portfolio and lower profitability. The company expects to close the acquisition of Teck's coal assets by third-quarter 2024 and could demerge the combined coal assets by the end of 2026; for now, the coal assets will remain a significant contributor to free cash flow. We therefore revised our outlook on Glencore to stable from positive, and affirmed all our ratings on Glencore and its debt instruments, including the 'BBB+' long-term issuer credit rating and 'A-2' short-term issuer credit rating. The stable outlook takes into account Glencore's ability to maintain its production levels and building financial headroom under the current rating.
