Teck Provides Steelmaking Coal Market Update
November 23 2020 - 12:27AM
Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK)
("Teck") today announced that it has increased its steelmaking coal
sales to China for the fourth quarter of 2020 in response to
increased demand. These sales have been at higher pricing levels
compared to markets outside China. Estimated total fourth quarter
sales remain within Teck’s existing guidance of 5.8-6.2Mt, with
approximately 20% of these sales now to Chinese customers.
Pricing in China for Teck’s steelmaking coal started to increase
around the middle of the current quarter when a large portion of
our overall sales were already concluded. Additional spot sales to
China were concluded gradually as the price was rising and achieved
an average premium in excess of US$35 per tonne above Australian
FOB spot pricing at the time each sale was concluded. Our contract
sales to Chinese customers are also priced on the basis of CFR
China price assessments. The most recent three cargos were sold at
prices between US$160/tonne and US$165/tonne CFR China. In a
declining coal price environment, our realized coal price relative
to benchmark would normally be lower than the long term average of
92%. As a result of these recent sales at premium prices, however,
we are estimating that our Q4 realized price will reflect that long
term average of approximately 92% despite the price drop for
markets outside China where the majority of Teck’s steelmaking coal
is sold.
We have had detailed discussions with customers regarding 2021
sales and are restructuring our sales book to target 2021 sales to
China of approximately 7.5 million tonnes. We caution that these
sales are subject to a range of risks including general market and
economic conditions, general and specific port restrictions,
Chinese regulation and policies, and normal production and
operating risks. We aim to sell these tonnes at CFR China pricing
which currently reflects a premium to Australian FOB spot pricing
of approximately US$50/tonne.
Forward-Looking Statements
This news release contains certain forward-looking information
and forward-looking statements as defined in applicable securities
laws (collectively referred to as forward-looking statements).
These statements relate to future events or our future performance.
All statements other than statements of historical fact are
forward-looking statements. The use of any of the words
“anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”,
“will”, “project”, “predict”, “potential”, “should”, “believe” and
similar expressions is intended to identify forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. These statements speak only as of the
date of this news release.
These forward-looking statements include, but are not limited
to, statements regarding Teck’s coal sales to China and elsewhere
in the fourth quarter of 2020 and in 2021, and the pricing of those
sales. These statements are based on assumptions regarding Teck’s
coal production, demand for steelmaking coal in various markets,
general economic conditions and conditions in commodities markets,
and import restrictions or other regulatory measures affecting
Teck’s coal sales and coal sales from other jurisdictions. The
foregoing list of assumptions is not exhaustive. Events or
circumstances could cause actual results to vary materially.
Factors that may cause actual results to vary materially
include, but are not limited to, acts of governments, including
changes in import restrictions or other regulatory actions,
changes in coal markets or general economic conditions,
unanticipated operational difficulties (including failure of plant,
equipment or processes to operate in accordance with specifications
or expectations, cost escalation, unavailability of materials and
equipment, government action or delays in the receipt of government
approvals, industrial disturbances or other job action, adverse
weather conditions and unanticipated events related to health,
safety and environmental matters), union labour disputes, impact of
COVID-19 mitigation protocols, political risk, social unrest. The
forward-looking statements in this news release and actual results
will also be impacted by the effects of COVID-19 and related
matters.
We assume no obligation to update forward-looking statements
except as required under securities laws. Further information
concerning risks and uncertainties associated with these
forward-looking statements and our business can be found in our
Annual Information Form for the year ended December 31, 2019, filed
under our profile on SEDAR (www.sedar.com) and on EDGAR
(www.sec.gov) under cover of Form 40-F, as well as subsequent
filings that can also be found under our profile.
About TeckTeck is a diversified resource
company committed to responsible mining and mineral development
with major business units focused on copper, steelmaking coal and
zinc, as well as investments in energy assets. Headquartered in
Vancouver, Canada, its shares are listed on the Toronto Stock
Exchange under the symbols TECK.A and TECK.B and the New York Stock
Exchange under the symbol TECK. Learn more about Teck at
www.teck.com or follow @TeckResources.
Investor Contact: Fraser Phillips Senior Vice
President, Investor Relations & Strategic Analysis 604.699.4621
fraser.phillips@teck.com
Media Contact: Chris Stannell Public Relations
Manager 604.699.4368 chris.stannell@teck.com
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