Shares of Anglo American plc advanced significantly during Wednesday's trading session in London, buoyed by fresh economic data and sector-wide attention ahead of the mining giant's financial report. The stock increased by 2.3% to reach 3,578 pence by mid-morning, recovering from losses incurred the previous day. Trading activity saw the share price oscillate between 3,546 pence and 3,589 pence, following a prior settlement at 3,499 pence.
Inflation Data Fuels Rate Cut Speculation
The positive momentum for UK equities, including Anglo American, was partly driven by the latest inflation figures from the Office for National Statistics. Data for January showed the annual inflation rate decelerating to 3.0%, down from 3.4% in December. This reading aligned with economist forecasts and has intensified market speculation that the Bank of England could initiate an interest rate reduction as soon as March. However, underlying price pressures remain, with services inflation demonstrating notable persistence. Thomas Pugh, Chief Economist at RSM UK, highlighted this stickiness, noting, "Services inflation is proving to be much stickier than headline inflation."
Focus on Upcoming Full-Year Results
The share price rebound occurs just days before Anglo American is scheduled to release its full-year financial results for 2025 on Thursday, February 20, at 0700 GMT. Investor scrutiny is particularly high following recent operational updates from the company. Anglo American recently revised its copper production guidance for 2026 downward and indicated approximately $200 million in site rehabilitation charges linked to its Chilean copper operations. For the current year, 2025, copper output is now projected to decline by 10%. Furthermore, the company's De Beers unit reported a 12% decrease in rough diamond production for 2025 as the corporate strategy increasingly pivots toward copper and iron ore.
Broader Market and Sector Context
The prospect of lower borrowing costs has provided a tailwind for UK stocks broadly. The FTSE 100 index achieved a record closing high on Tuesday, despite concurrent labor market data showing unemployment rising to 5.2% and wage growth moderating. The mining sector, however, has experienced volatility due to fluctuating metals prices. Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, commented on the monetary policy outlook, stating, "We expect two rate cuts by summer, one in March and another in June."
Wednesday also brought earnings news from other major industry players. Glencore reported a 6% year-on-year decline in its adjusted EBITDA metric. Concurrently, the commodities trader announced a plan to return $2 billion to shareholders. Glencore's Chief Executive, Gary Nagle, pointed to a positive trajectory, remarking, "The underlying momentum in H2 was clear."
Copper Takes Center Stage in Earnings Season
Copper has emerged as a critical theme this reporting period. BHP Group's half-year results surpassed analyst expectations, with copper—not its traditional profit driver, iron ore—leading the earnings contribution for the first time. This performance propelled BHP's shares to record levels. Andy Forster, a portfolio manager at Argo Investments, observed, "They smashed everyone's expectations from a dividend perspective."
Volatility and Investor Anticipation
Mining stocks are notoriously sensitive to shifts in commodity prices and interest rate expectations. For Anglo American, key questions regarding future production targets, cash flow generation, and the strategy for shareholder returns remain unanswered ahead of Thursday's report. The market will be parsing management commentary for clarity on these fronts, especially in light of the revised copper outlook and associated costs.
As the London market digests the inflation data and looks toward the Bank of England's next move, Anglo American investors are poised for a pivotal update that will shape the company's narrative for the coming year.
