Teck Resources looks good on steel demand
Demand for steel continues to explode from China and emerging markets, driving up the prices of iron ore and coking coal, while companies like Teck Resources (TSE:TCK.B), which provide the raw materials needed for steel production, go up with the prices.
Add to that an estimated increase in production in steel industries residing in G7 countries, and you have a huge market about to explode for some time to come.
Iron ore and coking coal are key ingredients in the production of steel, the reason they're moving up in price along with the demand for steel.
Consequently, companies like Tech Resources are able to command top prices for their raw materials as countries and companies battle to be sure they get what they need for production.
Tech Resources will increase contract prices for its top-grade coking coal from $128 a ton to $200 a ton for the quarter beginning in April and ending in June. When you consider they make a nice profit at the $128 level, you can see how good it should be going forward, barring any unforeseen geopolitical problems or slowing down in the economies of the countries generating the demand.
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