NTR - Potential commodity fallout from the Canadian Pacific rail strike

Earlier Sunday, Canadian Pacific (CP) locked out 3,000 employees over a labor dispute, the Company is the 2nd largest rail business in Canada, with service extending as far south as Kansas City. Last week, Nutrien (NTR) warned that it would need to reduce potash production if the shutdown were to last more than a few days; the statement came as fertilizer prices in the US hit record levels. Intermodal transport accounted for ~40% of Canadian Pacific (CP) carloads year to date, followed by grain (13%), energy (12%), coal (11%), and potash (5%). Crude by rail has fallen ~2/3rds from pre-pandemic levels; however, rail barrels still deliver ~130kb/d of heavy oil to US refineries, and a sustained reduction in availability could support US oil prices (USO) (XLE) while pressuring Alberta hub pricing (CNQ). Around 12% of US coal imports come from Canada, although ~95% of imports are metallurgical coal; suggesting an extended

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Potential commodity fallout from the Canadian Pacific rail strike