China Buys More Met Coal From Teck
The company explained its 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 $160/mt and US$165/mt CFR China. In a declining coal price environment, Teckís 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, the company is estimating that Q4 realized price will reflect that long term average of approximately 92% despite the price drop for markets outside China where the majority of Teckís met coal is sold.
The company also mentioned that it had detailed discussions with customers regarding 2021 sales and itís restructuring its sales book to target 2021 sales to China of approximately 7.5 million mt. They also warned investors 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. They are planning to sell those 2021 tons at CFR China pricing which currently reflects a premium to Australian FOB spot pricing of approximately $50/mt. change.