<article><p class="lead">Canadian coking coal producer Teck Resources estimates that fire damage to rail lines that serve its coking coal mines will shed 300,000-500,000t from its third-quarter sales volumes. </p><p>A <a href="https://direct.argusmedia.com/newsandanalysis/article/2231290">forest fire disrupted its rail service</a> to Canada's west coast ports after it damaged the rail line near Lytton, British Columbia on 30 June. </p><p>The estimate is based on timelines given by Canadian Pacific (CP) and Canadian National (CN) railroads that are assessing the damages and working on repairs, the company said. </p><p>Teck has rerouted shipments to Ridley Terminals in Prince Rupert to mitigate the effect of disruption, but the duration of the disruption and the overall impact are still under assessment. </p><p>Teck's 2021 guidance for coking coal production is an increase to 25.5mn-26.5mn t from 21.1mn t in 2020. </p><p>The outage could tighten an already tight Asia-Pacific market.</p><p>China has relied heavily on Canadian and US coking coal to replace Australian imports that it has banned since October. Canadian coking coal exports to China <a href="https://direct.argusmedia.com/newsandanalysis/article/2231514">rose to a seven-year high in May</a>. </p><p>Teck warned customers it could declare force majeure on coking coal deliveries, and some customers in Asia are expecting delays. "We received a potential force majeure notice from Teck on 4 July. Our shipment is currently waiting at Vancouver and we were informed that the waiting will take at least three weeks," a northeast Asian buyer said. </p><p><i>Argus </i>premium hard coking coal prices into China rose by $30.20/t, or 11pc, to $305/t cfr China in June and are up by 0.2pc to $307/t this month to 6 July. Suspension of domestic mines from late June, depressed Mongolian imports, as well as continued absence of Australian coal have compelled some state-controlled Chinese mills to purchase US and Canadian coal at above $300/t cfr China, given limited availability. </p><p class="bylines">By Dylan Wong</p></article>
