Implications Of B.C. Port Strike To NTR/CHE.UN/AFN/WTE
We spoke with NTR, CHE.UN and AFN regarding the B.C. port strike that commenced on
July 1, and potential impacts to operations. By law, longshore employees are required to
service grain ships, so there should be no effect on mainline grain exports unless the law is
broken. All other traffic was stopped, including outbound grain containers (for specialized
crops like pulses), bulk potash, coal, forestry products and seafood. The strike involves 7,200 workers and 49 employers at 30 ports. The likely duration of the strike is unclear as of July 7, but we would note that the situation could change in an instant if there is a negotiated
contract or the government steps up (Parliament called back for back-to-work legislation).
1) NTR: Potash loadings at the Canadian port of Vancouver (Neptune) have been on hold.
Overall, NTR noted that should the strike be over within the next week or so, there shouldn’t
be a meaningful impact to Q3/23 volumes (some July shipments shifted to August or
September, within Q3/23). But should the strike last longer than about a week, NTR may
need to temporarily shut down some production as inventory levels at mines reach capacity.
The company will also likely see increased logistics costs, as it seeks alternative ports to
export its potash. NTR is evaluating bringing forward scheduled annual downtime /
maintenance at certain mines. Domestic North American sales volumes should not be
materially impacted. Note, every 100kt change in potash volume is ~$30MM impact to adj.
EBITDA.
• About 70% of Canpotex (NTR/MOS export volumes) volumes typically go through
Vancouver. Canpotex has other ports, including Portland (but potash loadings at Portland
stopped in May following an issue with a conveyor at its Portland Bulk Terminal). A
smaller portion of our potash is typically transported east through the St. Lawrence
Seaway to the terminal facility in Saint John, New Brunswick. NTR is also considering
using alternative ports, including those on the U.S. pacific coast, U.S. Gulf and Thunder
Bay.
• With the Government currently in recess, there is a lower probability (vs. Montreal dock
workers strike in 2021) of a back-to-work legislation being passed by the Government this
time to end the strike.
2) CHE.UN: Chemtrade’s North Vancouver chlor-alkali plant rails the majority of its outgoing
product from the facility, so volumes should not be materially impacted near term. But note
that the plant does receive salt shipments (used as an input) via Vancouver ports. CHE.UN
notes that it has enough salt inventory to last for the month of July. But should the strike
extend into August, chlor-alkali production at the plant may be negatively impacted.
3) AFN: No material impact expected.
4) WTE: Assuming that rail traffic is not impacted, WTE should not see a material impact
given that it has collective agreements in place with its unions.