Teck coking coal exports cramped by port maintenance
Canadian mining firm Teck Resources shipped less coking coal than expected in the third quarter because of unplanned maintenance at the Westshore coal terminal in Vancouver.
Teck shipped around 6.7mn t in the July-September period and would have significantly exceeded its third-quarter sales target of 6.8mn t, but around 250,000t of coking coal with a value of CAD$55mn ($42.1mn) was delayed to the fourth quarter because of the Westshore maintenance, the company said in its third-quarter earnings report.
Logistical issues stemming from the Westshore terminal were also cited by Teck in its first-quarter 2018 report as a bottleneck preventing the company from achieving higher sales volumes. But Westshore said previously that it is making progress on upgrades at the terminal with a third stacker reclaimer set to begin operation by the end of first-quarter 2019.
Teck said its coking coal cost of production increased to $60-63/t this year from an earlier guidance of $56-60/t as the company brought in contract workers to ramp up production in a favourable price environment this year.
“Supply is actually very tight and as soon as there is a little disruption, we see that reflected in price. We know of logistics limitations and also of production challenges,” said Teck vice-president of coal marketing Real Foley in the third-quarter earnings call. “Steel pricing is also very high, not only in China but everywhere in the world. And that is continuing to support the steelmaking coal market.”
Teck said it expected sales of 6.7mn t in the fourth quarter and maintained its full-year 2018 metallurgical coal production guidance of $26mn-27mn t. The company plans to increase production to 26.5mn-27.5mn t for the 2019-2020 period.
Source: ARGUS MEDIA