Teck Resources Ltd said on Wednesday copper demand in China had surged past prepandemic levels and strong performance of the red metal helped the Canadian miner report a jump in quarterly adjusted earnings.
A pickup in economic activity after stimulus packages and the rollout of coronavirus vaccines globally have sparked a recovery in demand for industrial metals such as copper and other raw materials.
Copper demand in China has been rising since the second quarter of 2020 and is now above prepandemic levels, the company said, adding that demand elsewhere had started to pick up toward the end of 2020.
Miners will require higher prices to mobilize fresh supply, Teck chief executive officer Don Lindsay said.
“There’s got to be a real reward for going through the 10 to 15 years of pain to get something built,” Mr. 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 per cent to $326-million from the previous quarter.
Still, it fell a cent short of analysts’ average expectation of 61 cents a share.
Average price realized for Teck’s copper rose 13 per cent to US$3.92 a pound sequentially, although copper output and sales fell from the prior quarter as the company continues to deal with production disruptions related to the pandemic.
Teck also said its Quebrada Blanca Phase 2 copper project in Chile has surpassed the halfway point in April. The first production is expected in the second half of 2022.
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