Tsunami, labor disputes blamed for Teck revisions

CANADIAN producer Teck Resources is taking a cautious stance regarding its sales guidance in light of reduced steel production following the Japan tsunami, and also expects higher costs to take a chunk of its sales price.
Tsunami, labor disputes blamed for Teck revisions Tsunami, labor disputes blamed for Teck revisions Tsunami, labor disputes blamed for Teck revisions Tsunami, labor disputes blamed for Teck revisions Tsunami, labor disputes blamed for Teck revisions

A Teck operation.

Donna Schmidt

The company said last week that as a result of the earthquake and tsunami in Japan earlier this year some of its customers had deferred shipments because of a reduction in steel production demand, meaning second-quarter sales would now be on the lower side of its previously-announced outlook range of 5.5 to 6 million tonnes.

Teck added that its unit mining cost of product sold is projected to be between $C71 and $76 per tonne for the year, primarily due to one-time costs from labor disputes earlier in the year as well as higher-than-expected costs including diesel and external contractors.

For the second quarter, however, unit mining cost of product sold is expected to be higher than this range, from $80 to $84 per tonne. Costs will then begin to fall into the third and fourth quarters as volumes rise.

Average selling price for the second quarter, the producer said, should be about $US270 per tonne, versus a previous guidance of $280 to $290. Teck cited sales mix changes as well as the deferred Japanese shipments for the adjustment.

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