Westshore, Cloud Peak Energy Fall as B.C. Seeks Coal Export Ban
Westshore Terminals Investment Corp. plunged the most in 16 months after the premier of British Columbia urged Prime Minster Justin Trudeau to ban U.S. coal shipments from Canada’s westernmost province in retaliation for the Trump administration’s new tariffs on softwood lumber.
Such a ban would hurt Cloud Peak Energy Inc. and Lighthouse Resources Inc., which have both shipped coal through Westshore’s export terminal south of Vancouver. Cloud Peak fell 6.6 percent.
British Columbia Premier Christy Clark, in an open letter Wednesday, said that if Canada’s federal government doesn’t act on the request, she will take steps on her own to discourage the trade. Some 6.2 million metric tons of U.S. thermal coal passed through Vancouver’s sea port last year, Clark said.
“I told British Columbians that I would use every tool at our disposal to ensure we get a fair deal on softwood lumber,” Clark said in the letter. “Friends and trading partners cooperate,” she said, and “clearly, the United States is taking a different approach.”
Canadian terminals have gained importance at a time when new Pacific coast coal export projects have been repeatedly killed or delayed by environmentalist and local opposition groups. That’s hurt the ability of Cloud Peak and other miners to capitalize on Asian coal demand at a time when U.S. utilities have been shuttering coal-fired plants. President Donald Trump has repeatedly vowed to bring back U.S. coal jobs and cut better international deals.
“We consider carefully and seriously any request from a premier,” Cameron Ahmad, a spokesman for Trudeau, said by phone from Ottawa.
Cloud Peak closed Wednesday at $3.66, the lowest since September. The company didn’t respond to phone and email requests seeking comment.
“For us to get excited about Cloud Peak’s shares, we’d need to get excited about the export market and this would make it impossible to do that,” Jeremy Sussman, an analyst at Clarksons Platou Securities Inc., said by phone.
Peabody, Arch Coal
Rivals Peabody Energy Corp. and Arch Coal Inc., which also mine coal in the Powder River Basin, won’t be as affected because they don’t ship much coal out of Canada, Sussman said.
Westshore fell 12 percent in Toronto, the biggest loss since December 2O15. RBC Capital Markets equity analyst Walter Spracklin cut his rating on the company to the equivalent of hold from buy. Nick Desmarais, a company spokesman, said by phone that Clark’s proposal is “misguided” and that she “doesn’t have the power” to carry it out.
U.S. producers have also used Ridley Terminals Inc. at Prince Rupert port in northern British Columbia.
On Monday, the U.S. Commerce Department announced countervailing duties of up to 24 percent on softwood lumber from Canada. The move intensified an already simmering dispute after Trump attacked the Canadian dairy industry last week and reiterated his misgivings about the benefits of the North American Free Trade Agreement.
Follow us on social media: