Teck Resources lowers steelmaking coal price guidance after sales disruption

VANCOUVER – Teck Resources (TSX:TECK.B) says it expects to realize an average price for its steelmaking coal about 15 per cent lower than the quarterly benchmark price.

The company said Thursday it expects to get between US$160 and US$165 per tonne for its metallurgical coal product, necessary for iron and steelmaking, compared with the US$190 quarterly benchmark price.

Teck, the largest North American producer of steelmaking coal, said the difference in price came because of a lack of spot sales for about four weeks starting mid-April after Cyclone Debbie hit Queensland, Australia.

Metallurgical coal prices have swung wildly in recent months to peak above US$300 a tonne at times after weather disruptions in the major coal producing countries of China and Australia, as well as policy changes on the number of coal mining days allowed in China.

Teck had an average realized price of US$213 per tonne in the first quarter of this year, compared with US$75 per tonne in the first quarter of 2016.

The company’s share price closed down 84 cents or 3.8 per cent at $21.58.