UPDATE 2-Steel-making coal market could be balanced by mid-2015 -Teck
(Recasts with conference call)
By Nicole Mordant
VANCOUVER Oct 29 (Reuters) - The steel-making coal market, where prices have plunged to seven-year lows due to oversupply, could be back in balance by the middle of next year if producers continue to cut back output, the chief of Teck Resources Ltd said on Wednesday.
A further 10 million to 15 million tonnes of cutbacks are needed to reduce a supply overhang, Teck's chief executive Don Lindsay said. Teck estimates that producers have already announced cutbacks of around 25 million tonnes this year.
Vancouver-based Teck, the world's second-largest exporter of seaborne steel-making, estimates that about one third of this type of coal is being produced at a loss. All Teck`s coal operations were profitable in the third quarter, the company said.
"Given how much production is currently at negative margin, we think there is a good likelihood that this (cutbacks) will happen," Lindsay said on a conference call to discuss Teck's quarterly earnings, which beat market expectations.
"There is potential for the coal market to be in balance as early as mid-2015 if further cuts are announced and implemented," he said.
Teck estimates that of the 25 million tonnes of announced cutbacks only about 7 million to 8 million tonnes have been implemented so far.
Prices for steelmaking coal are at their lowest levels since 2007, below $120 a tonne, hurt by oversupply and lower demand from chief buyer China. Continued...