Analyst Note| Mathew Hodge, CFA |
No-moat Teck Resources performed strongly in the second quarter of fiscal 2021 given the backdrop of elevated commodity prices. Relative to the same period last year, copper and steelmaking coal prices were 81% and 26% higher, respectively, with Teck realising average prices of USD 4.40 per pound and USD 144 per tonne. Teck achieved production targets and higher sales volumes for these key commodities, delivering a gross profit of CAD 689 million--an over fivefold rise on the same COVID-19-affected quarter last year. Higher prices across all products more than offset the negative impact of the strengthening Canadian dollar, inflationary cost pressures, weaker zinc sales, and bitumen production.