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VANCOUVER, British Columbia, Nov. 23, 2020 (GLOBE NEWSWIRE) -- Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) ("Teck") today announced that it has increased its steelmaking coal sales to China for the fourth quarter of 2020 in response to increased demand. These sales have been at higher pricing levels compared to markets outside China. Estimated total fourth quarter sales remain within Teck’s existing guidance of 5.8-6.2Mt, with approximately 20% of these sales now to Chinese customers.
Pricing in China for Teck’s steelmaking coal started to increase around the middle of the current quarter when a large portion of our overall sales were already concluded. Additional spot sales to China were concluded gradually as the price was rising and achieved an average premium in excess of US$35 per tonne above Australian FOB spot pricing at the time each sale was concluded. Our contract sales to Chinese customers are also priced on the basis of CFR China price assessments. The most recent three cargos were sold at prices between US$160/tonne and US$165/tonne CFR China. In a declining coal price environment, our realized coal price relative to benchmark would normally be lower than the long term average of 92%. As a result of these recent sales at premium prices, however, we are estimating that our Q4 realized price will reflect that long term average of approximately 92% despite the price drop for markets outside China where the majority of Teck’s steelmaking coal is sold.
We have had detailed discussions with customers regarding 2021 sales and are restructuring our sales book to target 2021 sales to China of approximately 7.5 million tonnes. We caution that these sales are subject to a range of risks including general market and economic conditions, general and specific port restrictions, Chinese regulation and policies, and normal production and operating risks. We aim to sell these tonnes at CFR China pricing which currently reflects a premium to Australian FOB spot pricing of approximately US$50/tonne.
Forward-Looking Statements
This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as forward-looking statements). These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “should”, “believe” and similar expressions is intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These statements speak only as of the date of this news release.