Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Teck Resources’ Q1 2020 steel-making coal sales are being impacted by harsh weather and related disruptions affecting rail and terminal performance in British Columbia.


Substantial snow and extreme cold weather in January, along with rock and mud slide formation have affected rail lines and adjacent highways, adding to the Canadian company’s operational challenges. Persistent heavy rain has caused delays to remediation work.


Teck estimated the impact of these delays decrease sales by 1mn mt in Q1 to the range of 5.1-5.4mn mt. 


Clean coal inventory levels of its high mine location are also projected to reduce Q1 2020 coal production if harsh weather conditions persist. 


An unconnected event at the company’s Elkview mine involved a mechanical failure to its raw coal feed belt which is anticipated to halt raw coal processing in the plant for about two weeks, further impacting production. However, the miner is looking to supplement lost production from Elkview by utilizing its other operations throughout the outage.


The company will provide further guidance on its coal production and sales during its standard quarterly results announcement.


Teck actively mines 6 steelmaking coal operations that accounted for 62pc of its gross profit before depreciation and amortization in 2018. The company generated 26.2mn mt of steelmaking coal, or metallurgical coal in 2018 with sales of 26mn mt to its worldwide customer base.

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