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Teck Q1 profit rises as China copper demand returns to pre-pandemic levels

04/28/2021 | 01:08pm EDT
FILE PHOTO: Visitors pass a sign of sponsor Teck Resources at the PDAC annual conference in Toronto

(Reuters) -Teck Resources Ltd said on Wednesday copper demand in China had surged past pre-pandemic levels and strong performance of the red metal helped the Canadian miner report a jump in quarterly adjusted earnings.

A pick-up in economic activity after stimulus packages and the roll-out of coronavirus vaccines globally have sparked a recovery in demand for industrial metals like copper and other raw materials.

Copper demand in China has been rising since the second quarter of 2020 and is now above pre-pandemic levels, the company said, adding that demand elsewhere had started to pick up towards the end of 2020.

Miners will require higher prices to mobilize fresh supply, said Teck's Chief Executive Officer Don Lindsay.

"There's got to be a real reward for going through the 10-15 years of pain to get something built," Lindsay said.

Amid a dearth of new mines coming on stream, analysts are predicting deep structural supply deficits by 2025 for copper.

The increase in prices of copper, zinc and blended bitumen helped the company's first-quarter adjusted profit rise 31.4% to C$326 million ($263.92 million) from the previous quarter.

Still, it fell a cent short of analysts' average expectation of 61 Canadian cents per share.

Average price realized for Teck's copper rose 13% to $3.92 per pound sequentially, although copper output and sales fell from the prior quarter as the company continues to deal with production disruptions related to the COVID-19 pandemic.

Teck also said its Quebrada Blanca Phase 2 copper project in Chile has surpassed the half-way point in April. The first production is expected in the second half of 2022.

($1 = 1.2352 Canadian dollars)

(Reporting by Sahil Shaw, Nandakumar D in Bengaluru and Arunima Kumar in Bengaluru and Jeff Lewis in Toronto;Editing by Vinay Dwivedi and Amy Caren Daniel)

ę Reuters 2021
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