TSX:TECK.A - Post by User
Comment by
richc3on Jun 17, 2016 5:58pm
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Post# 24975976
RE:Will Teck Resources Ltd.’s Monster Rally Continue?
RE:Will Teck Resources Ltd.’s Monster Rally Continue?Thanks for sharing.
From my understanding, Teck is optimistic on copper moving forward, particularly in the 2nd half of this year. The fact that they were able to turn a profit in Q1 actually speaks well of their ability to do better in Q2 with the improving commodities prices.
They admit that with zinc they believe it's at least a year behind copper in terms of rebounding, but even then we can see it has been doing quite well over the past few months.
As for coal, they've confessed to some uncertainty there and I imagine that's part of why they are investing in the Fort Hills project to begin with. I'm not sure on the math where the $96USD a barrel breakeven came from though as to my understanding it was in the 40-50 range which is similar to a couple of the other players in the oil sands like Baytex.
In terms of commodities as a whole, while there is some concern regarding copper and coal, we also have to factor in that a lot of operations are actually closing because of the low price environment. Teck has shown that they can operate at these levels though and can likely take advantage of any natural rebound in prices as they come. If I'm not mistaken, China actually actually had a promising first half in terms of steel exports as well, something like 7% higher from the year prior.