Teck Resources Ltd. is bullish on steelmaking-coal prices, but not enough to add production capacity, said the head of Canada’s largest diversified miner.
“I’m feeling excited,” Teck Chief Executive Officer Don Lindsay said Monday in a Bloomberg TV interview. “In the last 10 days we’ve seen a clear change in direction in coal prices,” with a surge in forward prices for the material that’s used to make steel, he said.
The possibility that China could reinstate coal output restrictions at the end of March and its decision to stop importing coal from North Korea are supportive of prices, Lindsay said at the BMO Capital Markets metals and mining conference in Hollywood, Florida.
While the Vancouver-based company has additional metallurgical-coal capacity that it could bring into production fairly quickly, it has no plans to do so until the steel business in India appears to “be really taking off,” he said.
“In this business, if you add too much capacity you put the market into surplus and you hurt the whole rest of your production,” Lindsay said. “If we brought out another 3 to 4 million tons and ended up causing a price reduction, you can’t make the money back.”
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