NEW YORK Diversified miner Teck Resources Ltd. said it expects to sell more metallurgical coal on the spot market due to volatile steel market conditions.
"We are continuing contract discussions with our customers and are anticipating selling additional tonnage on the spot market, including to customers who have traditionally purchased the majority of their coal requirements on a quarterly pricing basis," president and chief executive officer Don Lindsay said in the companys third-quarter financial report.
"Vessel nominations for quarterly contract tonnages are determined by customers, and final sales and average prices for the quarter will depend on timely arrival of vessels and the performance of our coal-loading facilities," he said.
About 30 percent of Tecks 2012 sales were settled on a spot basis to China.
"We think that shorter-term pricing will remain because the market is volatile. We still have long-term contract arrangements, which gives more certainty on coal volumes," Lindsay said.
Vancouver, British Columbia-based Teck said that metallurgical coal prices have recovered since summer lows, but prices are still below sustainable levels (amm.com, Oct. 25).
There have been improvements in demand in some regions and a gain in gross domestic product growth in China, which have contributed to steady coal import volumes, while higher crude steel production in India has fueled demand, Teck said.
A version of this article was first published by AMM sister publication Steel First.