Teck flags more met coal cuts

TECK Resources, which last revealed plans to cut metallurgical coal output in late May, has flagged more output cuts in the December quarter if market conditions fail to improve.
Teck flags more met coal cuts Teck flags more met coal cuts Teck flags more met coal cuts Teck flags more met coal cuts Teck flags more met coal cuts

Image courtesy of Teck.

Blair Price

The Vancouver-based company committed to three weeks of rotating shutdowns of its six Canadian coking coal operations in this quarter.

“Rather than push incremental tonnes into an over-supplied market, we are taking a disciplined approach to managing our mine production in line with market conditions," Teck president and CEO Don Lindsay said at the time.

"We will continue to focus on reducing costs and improving efficiency to ensure our mines are cash positive throughout the cycle and well-positioned when markets improve."

In its recent quarterly report Teck revealed that these summer mine shut downs had started.

“Further steps to reduce production may be taken in the fourth quarter unless the supply-demand balance in the market improves,” Teck said.

The underway Summer shutdowns are expected to reduce Teck’s projected September quarter production by 1.5 million tonnes, or 22%, to 5.7Mt, while sales will dig into stockpiles by reaching a range of 6-6.5Mt for the period.

This change revised down Teck’s annual coal production to a range of 25-26Mt.

Teck signed most of its September quarter coking coal contracts at $93/t in line with the September quarter benchmark.