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Canada’s Nutrien eyes potash production boost amid turmoil in Russia, Belarus

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Nutrien Ltd, the world’s biggest potash miner, could boost production by up to 29% in coming years, depending on any sanctions facing rival producers in Russia and Belarus, the Canadian company’s interim CEO told Reuters.

Prices of granular potash fertilizer are near 10-year highs in the United States and Brazil, helped by Western economic sanctions against Belarus. Russia, home of Uralkali and EuroChem potash mines, faces possible economic sanctions if it invades Ukraine.

Uralkali and Belarus Potash Company (BPC) together account for more than one-third of global potash sales, according to BMO Capital Markets.

Soaring fertilizer prices have cut in to farmers’ incomes and contributed to global food inflation. Additional potash production may slow rising costs.

Saskatoon, Saskatchewan-based Nutrien could restart up to 4 million tonnes of idled annual capacity in that Canadian province in coming years as it assesses the long-term outlook for sanctions against competitors, interim Chief Executive Ken Seitz said in his first interview since his promotion in January.

“If these are short-lived events, we don’t want to spend all kinds of money staffing and opening up ground,” he said. “If this is going to be a longer-term problem for the market, we will absolutely do that.

“We will absolutely step into that void.”

A Russian troop buildup near Ukraine has stoked fears of war. The United States and United Kingdom are prepared to punish Russian elites close to President Vladimir Putin with asset freezes and travel bans if Russia sends troops into Ukraine, the White House and British government said on Monday.

As a first step in raising production, Nutrien may raise output by 700,000 to 1 million tonnes in the second half of 2022 at low expense, Seitz said, reiterating comments he made last year. Nutrien currently produces nearly 14 million tonnes, representing 19% of global sales.

Seitz could not say how soon Nutrien might restart the remainder of Nutrien’s idled capacity, which would involve more work.

Nutrien has had no talks, Seitz said, in his short time at the helm about any form of potash partnership with BHP Group, which is building a Canadian mine.

Canpotex Ltd, the export company owned by Nutrien and Mosaic Co, is fully committed for sales through March 31, illustrating strong demand for Canadian potash.

Global operational capacity, however, exceeds demand by over 10 million tonnes this year, according to BMO Capital Markets.

“In a normal situation, the potash market is oversupplied,” said BMO analyst Joel Jackson. “If I was Nutrien, I would probably hold back on my decision to expand too much too fast.”

Additional production from competitors will not fully replace BPC, which previously sold about 12.5 million tonnes a year, said Elena Sakhnova, an analyst at VTB Capital.

The board of Lithuanian Railways on Monday voted to stop transporting Belarus’ potash, isolating it from a key port.

Russian producers are unlikely to rush to increase their output because of speculation that Washington may grant a waiver to BPC’s U.S. buyers, essentially postponing sanctions from taking effect on April 1, Sakhnova said.

A EuroChem spokesperson said the company has no plans to accelerate ramp-up of its new production. Uralkali declined to comment.

Unlike the last time potash prices were this high over a decade ago, there are few advanced junior projects to add production. Construction of a small, 250,000-tonne Gensource Potash facility could start in Canada this summer, with first output in 2024.

For larger producers, adding additional tonnes is not as inexpensive or simple as they say, Gensource CEO Mike Ferguson said.

“They are so used to just controlling things in the industry and have started to believe their own marketing about having excess capacity,” Ferguson said.

 

(Reporting by Rod Nickel in Winnipeg and Polina Devitt in Moscow; Editing by Matthew Lewis)

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'Every dollar counts': Ontario's gas and fuel tax cut goes into effect – CBC.ca

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Ontario drivers experienced some relief from record-setting prices at the pump on Friday as the province’s gas tax cut came into effect.

The Ontario government cut the gas tax by 5.7 cents per litre until the end of the year, though Premier Doug Ford said he would consider an extension if inflation remains high.

Drivers noticed the impact Friday at gas stations in the Toronto-area, where prices dropped around 11 cents overnight to $1.93 — only partly attributable to the tax cut.

“Every dollar counts,” said Matthew Johnston as he filled up a cargo van at a downtown Toronto gas station. “This will actually help a bit.”

Gas prices in Toronto are up nearly 40 per cent since the start of the year, reaching a record high $2.15 per litre in early June before ending the month around $2.00 per litre.

Cut also applies to diesel

Johnston, who runs an upstart catering business and works at a winery, says the soaring price of gas paired with inflation has forced him to cut back on spending.

“I haven’t been able to go out or do anything anymore. It’s honestly just all gone to gas, rent — you know, just the cost of living,” he said.

He usually puts $60 in the tank to make his near-daily commute to the Niagara area. On Friday, he opted to try a $40-fill-up. 

The tax cut is expected to cost the province $645 million while it’s in effect. Analysts note Ford may face a tough decision in December when the measure expires and with prices likely to rise again before Christmas.

The legislation passed this spring will also cut fuel tax, which covers diesel, by 5.3 cents per litre until Dec. 31.

Hermain Kazmi called the tax cut a move in the right direction as he pumped gas into his car. He said high gas prices recently pushed him to use more public transit, but he expected to return to his previous driving habits if prices came down.

Kazmi was “100 per cent” in support of the government extending the tax cut into 2023, even expressing the hope it could lead to more financial relief.

“I don’t think a 10 cent drop would make a huge impact. It’s a good change but I think it needs to come down lower depending on how much inflation is and how salaries have not matched how inflation has gone up,” he said.

Price tied to increased demand, invasion of Ukraine

The soaring price of gas, a key driver of inflation, is tied to an increased demand for oil as the economy reopens after the COVID-19 pandemic. The situation has also been exacerbated by a global supply crunch caused in part by Russia’s invasion of Ukraine.

Ali Avali stopped to fill up his SUV on the way to a park outside Toronto, with his dog, an Alaskan Malamute, perched in the backseat.

“The only reason I drive is because of this guy. I take him out to do a bit of running in the country,” he said.

Once the loan is paid off on the SUV, Alavi said he plans to switch to an electric vehicle. He said he opposed a gas tax cut, suggesting that if prices continued to go up, more people may also be inclined to make the switch. 

“When I see gas prices going up, it doesn’t really piss me off,” he said. 

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LILLEY: Trudeau government tries to deny responsibility for Canada's air travel delays – Toronto Sun

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Our airports are a disaster and somehow the Trudeau government and their supporters think they can just say, “but it’s bad in other places too!”

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Is that really a good enough answer for Canadians?

It shouldn’t be.

The truth of the matter is that our delays have been going on since the end of March. Airports like Charles de Gaulle in Paris are experiencing problems now due to a strike.

On Thursday, Air Canada was the most delayed airline in the world with 74% of flights not leaving or arriving on time, according to Flight Aware. WestJet was the third most delayed airline globally with 59% of flights delayed.

The discount brand for both carriers, Jazz and WestJet Encore, weren’t far behind them on the list.

Is this due to problems globally or here at home?

You know the answer, but let me give you some more statistics. Canada had three airports in the list of the 20 most delayed airports in the world for departing flights on Thursday – Toronto, Montreal and Ottawa. We had five of the top 20 most delayed airports for arriving flights because Vancouver and Calgary made the list along with the other three.

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We don’t have the busiest airports in the world, just the most delayed, but somehow we’re expected to believe that government policies don’t have anything to do with this.

Not a single American airport is in the top 20 for having the most delays, but five Canadian airports are. Chinese airports like Shenzhen, Shanghai and Hangzhou dominate the list in large part because of that’s country’s COVID Zero policies.

“Our policies are so powerful that they’re impacting the entire world,” a senior Liberal messaged me after a recent column on how the Trudeau government’s policies are part of the problem.

They sent links to stories of airport delays in Amsterdam, England and elsewhere.

It’s all true that air travel is a problem elsewhere and staffing issues, including for airlines, is part of that problem, but so are government policies. And to deny that, or minimize it, is to ignore the problem.

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“On our end, we have done everything we can,” Transportation Minister Omar Alghabra said earlier this week.

He said the problems at airports are due to airlines scheduling, staffing issues, etc. Yet people are still needing to show up for their flights hours ahead of time to ensure they make it through security on time. Passengers are still being delayed and held back on planes once they land because the customs area is too busy and can’t hold any more people.

Those are issues the government is directly responsible for, not the airlines or airports.

The Trudeau government just extended a number of COVID travel measures until Sept. 30, including mandatory use of the ArriveCan app. According to customs officers, the app has increased the time it takes to process passengers by 400%.

Yet Alghabra wants you to think they have done all they can to alleviate the situation.

Other countries and other airports outside of Canada are experiencing problems but none as long or persistent as what we have been dealing with here in Canada. Instead of blaming passengers or airlines as Alghabra has done, he needs to work with all parties to find a solution.

That includes the government fixing the problematic areas they are responsible for at Canada’s airports.

blilley@postmedia.com

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95,000 GM vehicles unfinished in storage due to chip shortage – CBC News

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The global shortage of computer chips and other parts has forced General Motors to build 95,000 vehicles without certain components during the second quarter.

The Detroit automaker said in a regulatory filing Friday that most of the incomplete vehicles were built in June, and it expects most of them to be finished and sold to dealers before the end of the year.

The unsold vehicles amounted to 16 per cent of GM’s total sales from April through June. The company said Friday it sold more than 582,000 vehicles during the quarter, down more than 15 per cent from a year ago.

In a statement to CBC News, a spokesperson said only a small percentage of those vehicles, to be completed at a later date, were reserved for Canadian dealers.

The company reaffirmed its full-year net income guidance of $9.6 billion US to $11.2 billion with pretax earnings of $13 billion to $15 billion. For the first time, the company predicted it would make $2.3 billion to $2.6 billion before taxes in the second quarter. That fell short of analyst estimates of $3.97 billion, according to FactSet.

The chip shortage has vexed automakers around the globe since 2020, forcing many automakers to temporarily close factories and trim production. The shortage has limited the supply of new vehicles on dealer lots in the U.S. to around 1 million, when in normal years it’s about 4 million at any given time.

That has pushed prices to record levels and limited vehicle selection, but it’s also led to strong profits for most automakers.

In a prepared statement, GM said its North American production has been relatively stable since the third quarter of last year, but short-term parts disruptions are continuing.

“We are actively working with our suppliers to resolve issues as they arise to meet pent-up customer demand for our vehicles,” the statement said.

Most automakers have predicted minor improvement in the chip shortage during the first half of the year, with far better supplies from July through December.

GM shares fell slightly to $31.69 in Friday morning trading, after the filing was made public.

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