TORONTO (Reuters) - Teck Resources Ltd (TECKb.TO) shares fell nearly 4 percent on Thursday after the diversified Canadian miner clipped its forecast of the average realized price for its steelmaking coal in the second quarter, citing sales disruptions.
Vancouver-based Teck said it now expects an average realized price of $160 to $165 per tonne, lagging the $190 benchmark price and trailing the $213 price realized in the first quarter.
“The discount to benchmark is expected to widen to 13 percent to 16 percent, compared to the previous guidance of 5 percent, as there were very few prime hard-coking coal spot sales during the four-week period from mid-April, following the Queensland cyclone” in Australia, RBC Capital Markets analyst Stephen Walker said in a note to clients.
Teck, the largest North American producer of steelmaking - or coking - coal, expects sales volumes of 6.8 million to 7 million tonnes in the second quarter, compared with a previous forecast of 6.8 million tonnes.
Walker cut his estimate for Teck’s second-quarter operating free cash flow, before debt repayment, to $596 million from $800 million.
Shares of Teck, which also mines copper, gold and silver, dropped 3.75 percent after a trading halt was lifted, closing at C$21.58 on the Toronto Stock Exchange.
Reporting by Susan Taylor in Toronto and John Benny in Bengaluru; editing by Arun Koyyur and Jonathan Oatis