Teck Resources reported a strong third quarter of 2026 for its zinc business, with gross profit before depreciation and amortization rising 41% to $638 million at a margin of 31%, according to the company's Third Quarter 2026 conference call presentation dated October 29, 2026, published on teck.com. The zinc segment recorded revenue of $2,068 million and an average realized zinc price of US$1.70 per pound. Segmented EBITDA reached C$611 million, compared with C$480 million a year earlier, and the segmented EBITDA margin widened to 30% from 28%.
Teck attributed the improvement mainly to higher zinc prices and higher by-product revenues at Red Dog and Trail Operations. At the Trail smelter, refined zinc production rose 18% to 62 kt on a Teck-share basis, and gross profit before depreciation and amortization improved to $169 million from $54 million in the third quarter of 2025. Teck said this reflected its optimized feed strategy.
Red Dog zinc production was lower because of lower ore grades, as anticipated in the mine plan, and the company said Red Dog sales were within its guidance range. Net cash unit costs for zinc rose to US$0.27 per pound from US$0.17 per pound a year earlier, which Teck linked to lower production at Red Dog. For the fourth quarter of 2026, Teck expects Red Dog zinc sales of 65 to 75 kt.
For full-year 2026, Teck lowered its zinc net cash unit cost guidance to US$0.30 to 0.40 per pound from US$0.65 to 0.75 per pound. The revised guidance assumes a zinc price of US$1.65 per pound, compared with US$1.25 per pound in the previous guidance issued in September 2025. Teck expects zinc and refined zinc production to be at the high end of guidance for 2026.
The company also estimated that each US$0.01 per pound change in the zinc price would affect annualized adjusted EBITDA by about C$9 million. In its market commentary, Teck said spot zinc concentrate treatment charges had fallen sharply through 2026 as competition for feed intensified, while Chinese concentrate imports were set for another record year. The company said strong zinc and by-product prices were supporting smelter margins and reducing the likelihood of capacity cuts despite low treatment charges.
Teck also described 2026 supply growth as underwhelming because several large zinc mines are in decline and smaller operations cannot fill the gap, with market tightness hitting the ex-China market disproportionately and requiring Chinese exports to LME warehouses. Over the longer term, Teck pointed to limited exploration relative to peak levels, low zinc scrap recovery owing to the sacrificial nature of zinc in galvanizing, and infrastructure spending linked to industrial policy and climate mitigation as supportive factors. The presentation also updated investors on the proposed merger of equals with Anglo American.
Teck said it continues to expect the transaction to close 12 to 18 months after the September 2025 announcement, subject to regulatory approval and customary closing conditions. The company reported that it has received approval from the Government of Canada under the Investment Canada Act, is engaging constructively with China's anti-trust regulator, and has advanced integration planning. Teck estimates US$800 million of pre-tax recurring annual synergies and projects that zinc will represent about 6% of the combined company's 2027E production mix, compared with 71% for copper and 23% for premium iron ore.
Teck noted that the presentation contains forward-looking statements subject to significant risks and uncertainties.
Source: teck.com