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Saturday, September 22nd, 2018 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

Teck News Not Great for Commodity Group

By Tim Seymour

One of the world’s leading specialty miners blames an “unusually difficult winter” for a forecast of lower coal sales in this quarter. Not bullish.

While Teck (TCK) thinks performance will improve in the second quarter, the stock is still getting pounded after its downward guidance.

Turns out TCK now expects to sell only 4.6 to 4.9 million tons of coal in the current quarter and will as such cut production to match.

Previously we were looking to see around 5.3 million tons of coal come out of the company this quarter, so the roughly 13% expected decline is not a great omen for the health of the commodity boom.

Global growth questions make this worse. If China wants less steel from here on out, the second quarter will not be as rosy as TCK now seems to think — it remains to be seen.

Likewise, Mechel (MTL), Freeport McMoRan (FCX) are vulnerable here.

These companies are all within our sights at these levels, but could stand to get even cheaper before anyone needs to make a move.

Sentiment here goes a lot lower before it comes back up to the manic levels of speculative demand we saw late last year in the wake of the Australian floods.

In theory, Japan will need coal, copper and iron ore to rebuild. But right now, TCK is not making any predictions on that front.

The original article is published at http://seekingalpha.com


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