March 14, 2011 / 1:12 PM / 7 years ago

UPDATE 2-Teck cuts coal sales forecast; shares fall

* Cuts Q1 coal sales forecast to 4.6 mln-4.9 mln tonnes

* Previous forecast was for 5 mln-5.5 mln tonnes

* Shares fall 4 pct to $50.37 in early trade in New York

By Euan Rocha

TORONTO, March 14 (Reuters) - Teck Resources TCKb.TO trimmed its first-quarter coal sales forecast on Monday, citing rail traffic disruptions and adverse weather, sending shares down 4 percent in early trade in New York.

The diversified Canadian miner said it now expects coal sales of 4.6 million to 4.9 million tonnes for the quarter. That compares with an average of 5.3 million tonnes of sales in the first quarter of each of the past six years.

In January, Vancouver-based Teck had already warned that first-quarter coal sales would be hurt by logistics-related issues. At the time, Teck forecast first-quarter coal sales of 5 million to 5.5 million tonnes.

The company is one of the world’s top exporters of metallurgical coal, which is used to make steel. It said it is too early to assess any impact from last week’s earthquake in Japan.

Shares of Teck fell 4 percent to $50.37 in early trade in New York, and dropped 3.6 percent to C$49.12 in Toronto.

WEATHER ISSUES

Teck said sales in the first-quarter have been affected by unusually difficult winter weather conditions, which have caused higher than normal rail delays due to avalanches, as well as an unusual number of locomotive power failures.

The conditions have also forced rail operators to restrict train lengths, the company said.

The company said operations at its port facilities have also been affected by problems including high winds and mechanical failures.

Teck said it is working closely with its rail and port service providers to address these issues and to implement measures intended to enhance rail and port performance.

The company said it expects performance to improve in the second quarter, assuming more normal weather conditions. Teck has so far not altered its full-year coal sales forecast of between 24.5 million and 25.5 million tonnes.

Teck said the ongoing strike at its Elkview mine in southeastern British Columbia has not reduced sales much as it is still able to ship coal from inventories at the mine.

However, the company did note that slower railcar loading times at Elkview have affected rail cycle times. The company and the union representing workers at the site commenced mediation on March 12 to try to reach agreement on a new labor contract.

$1=$0.97 Canadian Reporting by Euan Rocha; Editing by Lisa Von Ahn and Peter Galloway

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below