TSX:TECK.A - Post by User
Comment by
VOKBLVRon Dec 28, 2016 4:16am
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Post# 25645906
RE:BNN
RE:BNNI don't think Andrew Bell's article is all that bad. He has balanced the exceptional revenue stream expected for quarter 4 of 2016 and the first quarter of 2017 with an outlook for declining met coal prices going forward. One tends to forget that Teck's cost to produce and ship a tonne of Met coal is in the lowest quartile of producers worldwide and most of the competition requires prices well north of $US100/ton and the lower prices predicted going forward are about US$150.00 which brings very substantial profits for Teck as Teck's costs are about $60.00 US. With respect to Zinc- Teck says that there is a worldwide shortage of Zinc concentrates and as a result there will be upward margins for the miners and RED Dog is a substantial supplier of concentrates to outside smelters.
Copper does not look all that good for 2017 but again Teck is at the lower end of the cost crve and has all kinds of projects ready to move forward if the price strengthens as expected due to continued demand from China, India and other countries I noticed there was no mention of Fort Hills which is expected to stop being aa drain on cash and to become a substantial cash generator sometime in 2018-not that far off.. On balance the tone seemed negative but he stated that Teck will return to investment grade in 2017.