UPDATE 3-Teck Resources says more coal production cuts needed
(Recasts with comments on coal market from conference call)
By Nicole Mordant and Allison Martell
July 24 (Reuters) - The steel-making coal market needs to cut another 10 million tonnes of production to get into balance, the chief of Teck Resources Ltd said on Thursday after the Canadian miner reported a sharp fall in profit, mainly due to weak coal prices.
Producers in the oversupplied market have already announced cuts of about 20 million tonnes but that is not enough, Teck Chief Executive Don Lindsay said. Only about 3 million tonnes of that has been implemented, with the rest expected to come into effect early next year, he added.
"With such a huge percentage of the industry operating in a cash negative basis we do anticipate that the 10 million tonnes of further reductions that we think are needed will occur. We just can't predict the timing," Lindsay said on a conference call.
As a result, current market conditions could persist "for a couple of quarters or longer", he said.
Vancouver-based Teck is the world's second-largest exporter of seaborne steel-making coal. Prices are at their lowest levels since 2007, below $120 a tonne, hurt by oversupply and lower demand from chief buyer China.
Lindsay cautioned that although U.S. and some Australian producers have shuttered production, other Australian companies have increased output.