Teck Resources Ltd. (TSX:TCK.B)(NYSE:TCK) is up more than 50% in recent weeks, and contrarian investors are wondering if this is the start of a much larger move or simply another head fake before a run to new lows.
Prices for steel-making coal, copper, and zinc remain near multi-year lows, and most investors are completely avoiding the space, but contrarian investors know these commodities run in cycles and the bottom could be in sight for Teck's core products.
Underneath the noise, Teck Resources Ltd. continues to perform pretty well. The Vancouver-based miner has been under immense scrutiny from investors in recent weeks, as three rating agencies have cut its credit rating to junk status.
It would not be incorrect to say that Teck Resources Ltd. (TSX:TCK.B)(NYSE:TCK) is in survival mode. Coking coal prices have plunged from $300 per tonne in 2011 to $74 per tonne this week, and several U.S.
Teck has 100 years' worth of coal resources, 30 years of copper resources, and 15 years of zinc resources. China's growth will ramp up again at some point and supply shortages are likely to occur along the way as producers tend to overshoot on closures ...