Entornointeligente.com / Reuters / (Recasts to focus on steelmaking coal outlook, adds quote from CEO, analyst, profits from key units)
By Susan Taylor
TORONTO, Feb 14 (Reuters) – Teck Resources Ltd, the world’s second-biggest exporter of steelmaking coal, said on Wednesday that growing global steel production is expected to boost demand for its coal in 2018, though coal trade competition will also likely rise.
Vancouver-based Teck, which also mines copper, zinc, gold and oil sands, reported quarterly profit in line with analyst estimates, as higher commodity prices offset lower sales of steelmaking coal.
“Our financial position is very strong and with the startup of Fort Hills and favorable markets for our key products, we are well positioned for the coming year,” Chief Executive Don Lindsay said in a statement.
Teck holds a 20.89 percent stake in the Fort Hills oil sands mine, which produced its first oil in late January, with partners Suncor Energy Inc and Total SA. Production is expected to reach at least 90 percent of capacity by year end.
Citing strong world economies, Teck said it appears demand for steelmaking coal will continue to climb in 2018 while ongoing logistics and production issues at key Australian mines support prices.
It is unclear how an expected recovery in Australian exports this year and coal trade rebalancing will affect pricing, but Teck said it is well positioned to respond to changing markets.
The company expects to produce between 26 million and 27 million tonnes of steelmaking coal in 2018, noting it can adjust volumes based on market demand.
Annual production from 2019 to 2021 is expected to be higher than 2018, Teck said, without specifying volumes, despite the closure of its Coal Mountain operations mid-year.
“While capex guidance is somewhat higher than we expected, Teck is spending more in the coal business to maintain production in 2018 following the Coal Mountain closure,” said TD Securities analyst Greg Barnes in a report, noting the C$1.56 billion capital expenditure forecast.
Teck sold 6.4 million tonnes of steelmaking coal in the fourth quarter at an average realized price of $170 per tonne, for a C$638 million unit gross profit.
The company’s copper business posted an operating profit of C$296 million, boosted by lower costs and higher production, while its zinc unit reported a gross profit of C$350 million.
Teck reported an adjusted profit of C$1.21 per share, while analysts expected C$1.20.
Teck said its decision to develop the second-phase Quebrada Blanca project depends on regulatory approvals, which are not expected before the second half of 2018. (Reporting by Susan Taylor and Shubham Kalia; Editing by Meredith Mazzilli)
GLOBALES: UPDATE 2-Teck sees strong demand for steelmaking coal in 2018
Con Información de Reuters
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