Teck sees strong demand for steelmaking coal in 2018

Teck Resources Ltd 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, said it is “feeling pretty good about 2018” after reporting in-line financial results.

“Most of us forget what this feels like, but it’s certainly very good for commodity markets, and they are now demand driven, rather than supply driven,” chief executive Don Lindsay said on a conference call. “We see continued strength in commodity prices and Teck is certainly well positioned to take advantage of that.”

Steelmaking coal demand is expected to keep climbing in 2018, Teck said, while ongoing logistics and production issues at key Australian mines support prices.

Teck sold 6.4 million tonnes of steelmaking coal in the fourth quarter, at an average realized price of $170 per tonne. It sees 2018 output of 26 million to 27 million tonnes of steelmaking coal. Production in 2019 to 2022 will range between 26.5 million and 27.5 million tonnes.