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UPDATE 1-Westshore stock recovers after Canada region seeks U.S. coal ban
April 27, 2017 / 10:32 PM / 8 months ago

UPDATE 1-Westshore stock recovers after Canada region seeks U.S. coal ban

(Adds Westshore urging Trudeau to reject ban, updates share price)

April 27 (Reuters) - Shares of port-operator Westshore Terminals Investment Corp recovered some lost ground on Thursday after dropping sharply a day earlier on news British Columbia had urged the government to ban U.S. coal exports from provincial ports in a trade spat.

Shares of Westshore, which operates North America’s largest coal export terminal, lost nearly one-fifth of their value on Wednesday on the Toronto Stock Exchange before closing 11.8 percent lower.

The shares closed up 1.8 percent on Thursday at C$23.45.

In a letter to Prime Minister Justin Trudeau on Wednesday, British Columbia Premier Christy Clark asked the federal government to ban transshipments of U.S. thermal coal for Asia through her province. Clark requested the ban in reprisal for the U.S. decision on Monday to impose a 20-percent tariff on softwood lumber.

British Columbia is Canada’s largest provincial producer and exporter of softwood lumber, accounting for 50 percent of Canada’s exports to the United States.

Asked whether Ottawa would grant Clark’s request, Trudeau press secretary Cameron Ahmad said: “We’re considering it as we would seriously consider any other request from a premier.”

Nick Desmarais, a spokesman for Westshore, on Thursday dismissed Wednesday’s hit to the company’s shares as “typical stock market reaction” to Clark’s letter, which he said would not result in a ban. He added that he expected the shares to bounce back.

Westshore wrote to Trudeau on the same day as Clark, urging him to reject the premier’s request, according to the company.

Clark’s letter came as her Liberal Party, unaffiliated with Trudeau’s federal Liberals, is slipping in the polls for a May 9 election. The opposition New Democratic Party has surged to a lead of almost 10 percentage points, according to a Mainstreet/Postmedia poll released on Tuesday.

A spokesman for Cloud Peak Energy Inc, one of the biggest U.S. coal companies exporting coal through British Columbia, said: “We are aware of the (Clark) letter. Cloud Peak Energy values our Canadian trading partners and hopes this matter is resolved to benefit all interests.”

Cloud Peak shares closed 6.6 percent lower on Wednesday and were down 7 percent on the day on Thursday.

In Quebec, another big lumber-producing province, softwood negotiator Raymond Chretien said the sides should try to settle the dispute ahead of efforts to renegotiate terms of the North American Free Trade Agreement.

U.S. President Donald Trump said on Thursday he was ready to kill the 23-year-old trade agreement but agreed to renegotiate it due to pleas from the leaders of Canada and Mexico. (Reporting by Allison Lampert in Montreal, Ethan Lou in Calgary, Alberta, and Valerie Volcovici in Washington)

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