Teck (NYSE:TCK) CEO Says Metal Demand Consistent

Teck Resources (NYSE:TCK) (TSE:TCK-B) CEO Don Lindsay said at the RBC Global Mining and Materials Conference in Toronto that even though metal prices have fallen recently, demand has continued to remain steady.

"We don't think there's been any change in fundamental demand," said Lindsay.

I find that assertion hard to believe because of the China inflation problems coming from their overheated urban property market, Europe's sovereign debt crisis, and emerging news the U.S. recovery really isn't one, although many of us already knew that.

With all this in mind, then where is the demand coming from?

Now we must take into consideration when we say China is battling inflation and the consequences will be less metal imports, that doesn't mean there won't be any imports, just less than expected from an economy that had been growing at about a 12 percent rate.

Add that together with the economic conditions in America and Europe though, and the combination makes a huge dent in raw material and metals demand, and it's hard to believe that hasn't affected Teck Resources in any way.

Copper prices alone reveal lowering starts of new homes and commercial properties; the reason why prices have plunged so much over the last month and a half. Since mid-April copper prices have declined by over 20 percent.

If demand has remained steady as Lindsay asserts, then what is driving down the prices of copper?

My problem with the comments made by Lindsay are in the short- and mid-term. I have no doubt in the long-term there will be a rebound, but to say demand has remained steady, implying there has been no decline, is pushing the limits on the realities of the market.

Lindsay believes there will be tight copper and coal markets over the next several years, and that will help Teck.

That may or may not be accurate, but what that means over the next couple of years is the question, and in that regard his assertions aren't convincing to me, but we'll see with the next quarterly report if they line up with the way the company is actually performing.